Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

LLOYD'S BILL (By Order)

Order for Third Reading read.

To be read the Third time upon Tuesday 9 March at Seven o'clock

ALEXANDRA PARK AND PALACE BILL (By Order)

LONDON TRANSPORT (LIVERPOOL STREET) BILL
(By Order)

SEVERN-TRENT WATER AUTHORITY BILL (By Order)

GREATER LONDON COUNCIL (GENERAL POWERS)
(No. 2) BILL (By Order)

TEES AND HARTLEPOOL PORT AUTHORITY BILL
(By Order)

BRITISH TRANSPORT DOCKS BILL (By Order)

FELTHAM STATION AREA REDEVELOPMENT
(LONGFORD RIVER) BILL (By Order)

CUMBRIA BILL [Lords] (By Order)

Orders for Second Reading read.

To be read a Second time upon Thursday 11 March.

Oral Answers to Questions — AGRICULTURE, FISHERIES AND FOOD

Price Increases

Mr. Renton: asked the Minister of Agriculture, Fisheries and Food whether he is satisfied with progress in the discussions with his European Economic Community colleagues about the next round of agricultural price increases.

The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): I refer my hon. Friend to the statement I made to the House on 18 February 1982.

Mr. Renton: Does my right hon. Friend agree that the whole issue of agricultural prices is a ratchet with which to obtain concessions on other fundamental issues in the

Community? Does he envisage, in the end, accepting a price increase of below 9 per cent. in order to obtain concessions on Britain's long-term budgetary contributions?

Mr. Walker: No, Sir. I have made it clear that the proposals in their present form, which would include a green pound revaluation of 4 per cent. and would mean that British farmers would obtain price increases way below the 9 per cent. proposed by the Commission, are completely unacceptable to the British Government.

Mr. Geraint Howells: When will the Minister announce the conclusions of this year's price review?

Mr. Walker: I am not in a position to do that, because it depends on the actions and views of nine other Member countries and the Commission. I am not sure when all these views will coincide, but I hope that it will be as soon as possible.

Mr. Buchan: Why has the Minister so enthusiastically welcomed the Commission's action in taking the French to court? Should we not follow something of the French lead in adopting national aids which would, at least, give aid where it is needed in the industry as well as helping the consumer? Should the right hon. Gentleman not now be pressing the Chancellor to reduce interest rates, the cost of which to the farmer has trebled over the past four years?

Mr. Walker: I am relieved to hear the hon. Member proposing more public expenditure on agriculture, which is in sharp contrast to other Labour proposals, such as agricultural re-rating. In the Community market in which we operate it is completely unfair for a Government to subsidise its farmers and create unfair competition with other farmers.

Mr. Colin Shepherd: Is my right hon. Friend aware that his remarks concerning the unacceptability of the green pound revaluation will be well received by agriculture? Does he agree that the massive green pound differential engendered by the Labour Government, resulting in enormous negative MCA's, did massive damage to United Kingdom agriculture? Is he aware that the industry needs this respite to make up the difference?

Mr. Walker: Yes, Sir. There is no doubt that a long period of negative MCA's was very damaging to British agriculture's prospects both in the home and overseas markets. I am glad to say that since we reversed that policy we have improved our self-sufficiency to the extent of an improvement in our balance of payments of £1,000 million a year.

Unfit Meat (Staining)

Mr. Norman Atkinson: asked the Minister of Agriculture, Fisheries and Food what representations he has received from the pet food industry in regard to the staining of unfit meat.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): Representatives of the pet food industry have indicated that they would not be opposed to a requirement to stain material emanating from knackers' yards and unfit carcase meat, but no offals, emanating from slaughterhouses. They have also commented on the type of stain which might be appropriate for this purpose.

Mr. Atkinson: The House will be delighted with that positive response from the pet food industry, but does the Minister appreciate that while dogs are colour blind and unable to distinguish between green and violet—the suggested colours for staining purposes—dog owners might object to having to put out violet or green food for their pets? Will the Minister reassure pet owners that, whatever staining takes place, the colour can be removed by the pet food industry and that there will be no difference in the food's appearance?

Mrs. Fenner: The Government are still considering what stain should be prescribed. We shall take account of the preference of pet food manufacturers for a stain that disappears when the meat is heat treated and therefore does not give an unacceptable appearance to the pet food. We shall, however, wish to choose a stain that is immediately identifiable on raw meat.

Mr. Skinner: Has the Minister had a chance to see a letter from a worker at Heathrow, which refers to illegal trafficking in uncooked meat by Qantas Airways via Bombay and Bahrain? Is she prepared to take action to see that this illegal trafficking is stopped?

Mrs. Fenner: The Government are most anxious that illegal trade in unfit meat should be prevented. We are preparing revised meat sterilisation regulations with the utmost urgency to stop any illegal trade in unfit meat. As the hon. Gentleman knows, we are supporting his Bill to increase the penalties for these offences.

Milk

Mr. Nicholas Winterton: asked the Minister of Agriculture, Fisheries and Food what proportion of the recent milk price increase will be paid to the farmer; and how this proportion will change after 31 March 1982.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith): Of the extra revenue generated by the increase, the Milk Marketing Board will receive about 73 per cent. I cannot yet say how this proportion will change as a result of the spring review.

Mr. Winterton: I am grateful for that reply. Does my right hon. Friend agree that the profit margins of both the producer and the dairy trades industry are under severe pressure? Will he bear in mind, in any future increase in the price of a pint of milk, that our unique doorstep delivery is vital not only as a social service but to farmers?

Mr. Buchanan-Smith: I agree with my hon. Friend. We have struck, through the Binder-Hamlyn negotiation, a sensible and objective balance between the different interests. Only if the dairy producer and distributor prosper will the housewife and the consumer be sure of a proper and continuing service.

Mr. Torney: I am pleased to hear the Minister's remark about a continuing service. Is he aware, however, that the increase in milk prices will affect consumption in my constituency, where there is mass unemployment and where masses more people are on short-time working? They will find difficulty in meeting the price of milk. What is the Minister's view of the effect of the increase on lower-income groups and the unemployed?

Mr. Buchanan-Smith: I invite the hon. Gentleman to reflect on the fact that the increase in the retail price of

milk in January was the first for a year and that it amounted to only 8 per cent., well below the level of inflation. If the hon. Gentleman does not want milk producers and distributors to be able to recover their costs, I hope that he will have the courage to say so.

Mr. Jim Spicer: My right hon. Friend will have heard the European Commission's latest proposals on co-responsibility. Will he make it clear that these proposals are completely unacceptable to the House and to our dairy farmers? Does he agree that the whole question of co-responsibility levies should be re-examined as a matter of urgency?

Mr. Buchanan-Smith: We have the gravest reservations about what has been proposed by the Commission and supported by other countries on the co-responsibility levy. The effect is to discriminate against more efficient producers in the Community, including our own. It is significant that other countries, notably the Netherlands and Denmark, share our view strongly.

Mr. Newens: Does the Minister recognise that the objective must be to maximise the consumption of milk in the interests of consumers and producers? Does the right hon. Gentleman think that he is doing enough to defend the doorstep delivery side of the industry, which has had a difficult time and is still under long-term threat from possible bulk imports of milk from the Continent? What is the Minister's stance on the doorstep delivery system?

Mr. Buchanan-Smith: The Government are absolutely resolute in their defence of doorstep deliveries and of the tremendously good service that it provides for consumers. It is significant that the results of the Binder-Hamlyn review were agreed by both sections of the industry. I hope that this underpins the future of doorstep deliveries. The House will be aware of the strong stand that the Government are taking on milk imports in relation to the threats made in the European Court.

Farm Workers (Earnings)

Mr. Henderson: asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the rate of increase in real terms of farm workers' earnings.

Mrs. Fenner: I am satisfied that the level of farm workers' earnings strikes a fair balance between the interests of employers and employees in agriculture.

Mr. Henderson: Does my hon. Friend agree that there have been enormous improvements in productivity in agriculture over recent years, especially in comparison with other industries? Is she aware that farm workers have played a crucial role in co-operating towards that achievement and that, in the process, they have improved substantially their skills and responsibilities? Will she ensure that the efforts of those concerned are fully recognised in future negotiations?

Mrs. Fenner: I readily acknowledge that farm workers have made a notable contribution to agriculture's record of increased productivity. The reward for improved productivity is a matter for individual employers and employees.

Miss Maynard: In view of what the Minister says, is it not a disgrace that the average earnings of farm workers are now £30 a week below the average earnings of


industrial workers and that the gap is getting wider? Is it not an absolute scandal that more farm workers receive family income supplement than any other single group of workers, despite their fantastic production record?

Mrs. Fenner: I am sorry to disagree with the hon. Lady's figures, but the gap between agricultural and industrial earnings is narrowing. In 1970 farm workers' earnings were about 70 per cent. of industrial earnings. In 1981 they were about 80 per cent. The agriculture and fishing industries contain the second largest group of two-parent families receiving family income supplement. The figures have to be interpreted with care, because they include agriculture and fisheries, and self-employed and part-time agricultural workers.

Mr. Colin Shepherd: Is it not correct that both sides of the agricultural wages board have acknowledged that the board is serving the industry well? Does not the harmony in the industry reflect this basic satisfaction?

Mrs. Fenner: Yes, indeed. I am satisfied that the board has a wide enough brief to consider all the factors in making its awards. I have complete confidence in the board and its chairman.

Mr. Strang: Does the Minister not accept that farm workers are skilled workers and that the industry, under successive Governments, has consistently underpaid them? Has she seen a written answer that I received from her right hon. Friend, which shows that, with the exception of the Irish Republic, farm workers in the United Kingdom are the worst paid in the EEC? Will she join me in urging all farm workers to join the Transport and General Workers Union, with which the agricultural workers union has recently decided to merge, so that the TGWU can advance farm workers' interests as effectively as the National Farmers Union advances those of farmers?

Mrs. Fenner: The hon. Gentleman will not be surprised if I do not support any of his latter remarks. I note his comment about agricultural wages. The Agricultural Wages Board is independent and autonomous. It has a wide representation of employers and employees. I am satisfied that those employers and employees and all the interests in agriculture have ample opportunity to make their cases to the board.

Foreign Fishing Boats

Mr. John MacKay: asked the Minister of Agriculture, Fisheries and Food whether he proposes to take steps to prevent part of the United Kingdom total allowable catch being taken by foreign fishing boats registering in the United Kingdom.

Mr. Buchanan-Smith: My right hon. Friend the Secretary of State for Trade, who is responsible for registration, is seeking to ensure that the owners of certain fishing boats are properly entitled to claim British registration and that their vessels fully comply with the rules that such registration imposes.

Mr. MacKay: Does my right hon. Friend realise that that answer will be warmly welcomed? Will he assure the House that he will continue to press the Department of Trade for something to be done about this practice? Is he aware that the fishing industry is greatly annoyed that foreigners should so abuse our rules and regulations? The British public also do not like foreigners coming in and playing our rules so unfairly.

Mr. Buchanan-Smith: This is a matter about which I am deeply concerned. The past year saw a growth in this practice, particularly involving former Spanish vessels. In addition to what my right hon. Friend is already doing, a review is taking place of the Merchant Shipping Act 1894. A consultation document has been issued and the fishing industry has been invited to comment on it. I shall be working closely with my right hon. Friend on this matter, which needs to be dealt with resolutely.

Mr. J. Enoch Powell: Has the Minister taken note of the gross excess of the catches over some of the quotas that were informally agreed last October and of the particular countries whose boats were responsible for the most serious of those excesses?

Mr. Buchanan-Smith: I have and I regard as thoroughly unsatisfactory the way in which some of the proposed quotas have been exceeded by particular countries. The Government have made their view clear on this to the Commission, and this underlines the fact that if we are to have effective conservation we must have it on a basis that is agreed and enforced internationally.

Crops (Market Support)

Sir Albert Costain: asked the Minister of Agriculture, Fisheries and Food which agricultural crops have required market support in the past year.

Mr. Peter Walker: The information requested is given in table 25 of the annual review of agriculture 1982 White Paper. This gives details, including a breakdown by product, of public expenditure under the common agricultural policy and on national grants and subsidies.

Sir Albert Costain: Does the Minister agree that this market support gives farmers confidence to plan ahead and gives a great deal of help with our balance of payments?

Mr. Walker: Yes. I am glad to say that there has been a substantial improvement in our self-sufficiency in food. In the last few years that has improved our balance of payments by £1,000 million a year.

Mr. Torney: Is what the Minister has so far been able to do for the horticultural section of the industry sufficient to offset the huge subsidies given by the Dutch for their gas heating? Is the industry yet in a stable position, and has the Minister taken into account the fact that despite these problems the Dutch workers are still paid 50 per cent. more than their British counterparts?

Mr. Walker: We are expecting an agreement, perhaps this coming week, on the problem of the Dutch gas subsidy. I hope that it will solve this problem permanently. Unless that happens at the meeting on 15 March, legal action will be taken against the Dutch. Unlike a number of competing countries I have given our horticulture industry the full extent of national aid allowed by the Commission.

Mr. Heddle: Does my right hon. Friend realise that many farmers have suffered complete crop losses and that, apart from those in Wales, the South-West and Scotland, who will be fairly compensated, they will get no compensation from Community funds for the severe damage they sustained in December and January? That applies particularly to those who produce vegetables, as do many of the growers in my constituency. Will my right


hon. Friend lobby Brussels to see whether further Euro funds, over and above those announced by his right hon. Friend on 22 February 1982, can be found for this purpose?

Mr. Walker: A decision has been taken. No further Euro funds will be available. I am glad to say that over the country as a whole farming losses resulting from the bad weather have proved to be far smaller than were expected at the time. I hope that all parts of the House will be pleased at that. The aid given by the European Community is not confined just to Scotland and Wales.

Mr. Skinner: Does the Minister have any difficulty in reconciling his attitude on agriculture, which is propped up by Government intervention, and what he said about agriculture assisting in maintaining a balance of trade surplus as a result of that Government intervention, with the opposite philosophy put forward by the rest of the Cabinet, who are arguing that Government intervention in industry is bad. There was a balance of trade deficit with the EEC in semi-manufactured and manufactured goods of £2½ billion in the last financial year. How does the hon. Gentleman reconcile those two views?

Mr. Walker: I am delighted to say that in all the policies I pursue I have the enthusiastic support of all my Cabinet colleagues.

Mr. Skinner: That is because the right hon. Gentleman is a plastic dummy.

Fishing Industry (Aid)

Mr. Beith: asked the Minister of Agriculture, Fisheries and Food what recent representations he has received from the fishing industry in England and Wales about financial aid.

Mr. Buchanan-Smith: My right hon. Friends the Minister and the Secretary of State for Scotland met representatives of the fishing industry on 17 February. My right hon. Friend has also received written submissions from several bodies, including the main organisations representing fishermen.

Mr. Beith: Has the Minister and his right hon. Friends had time, since those meetings and the other meetings that many other hon. Members attended on 17 February, to prepare a response to the arguments of the industry? Does he recognise that all the difficulties faced by the industry are not of its making but are the results of such problems as failing to get a satisfactory common fisheries policy? Will he recognise in his response that many of the problems apply just as strongly to vessels of less than 80 ft. as they do to the larger vessels?

Mr. Buchanan-Smith: Submissions have been received that bring in a variety of information, and it will take a little time to study that information and put it all together. The study has not yet been completed, but I assure the hon. Member and the House that as soon as it has been we shall come to a decision.
The general problems facing the fishing industry are something that must be recognised in our negotiations with Europe, which, in previous years has given us generous support.

Mr. James Johnson: Is the Minister aware that in Hull we are in such a desperate plight that we are forced to scour

the world to sell our ships? We have been to West Africa, Australia and New Zealand. Has the Minister any plans to alleviate the misery of our fishermen?

Mr. Buchanan-Smith: We are considering the cases presented to us. The hon. Gentleman knows that in previous aid schemes the particular area fleet that he mentioned was generously treated. For example, during the last two years it received almost £7½ million, which is a substantial amount of public money.

Sir Patrick Wall: Although Government aid to the fishing industry has been about £58 million a year, does the Minister recognise that there is still a case for further aid, pending restructuring? Does he also recognise that there is a special case for distant-water vessels and vessels under 60 ft. long?

Mr. Buchanan-Smith: A great variety of cases have been put to us and that is what we are studying. I am not prepared to come to a conclusion until I have analysed all the evidence that was put to me. I assure my hon. Friend that we are analysing this very carefully.

Mr. Home Robertson: What consultation has the Minister had with his right hon. Friend the Secretary of State for Scotland on this issue? Since a cash emergency is facing the industry, can the Minister confirm that he has contingency funds to distribute to the industry at short notice?

Mr. Buchanan-Smith: My consultations with my right hon. Friend are daily. I assure the hon. Gentleman that we shall carefully consider the case that he has presented.

Mr. John Townend: Is my right hon. Friend aware that in the Bridlington fishing fleet the need for financial aid will be much greater if in the fourth quarter of this year we have a repeat of what happened last year, when the fleet was restricted from fishing for cod? If it cannot fish for cod at that time of the year there are no other fish available and the fleet has to tie up.

Mr. Buchanan-Smith: I understand the problems about certain restrictions that we had to put on, but, equally, I ask my hon. Friend to recognise, as I am sure the fishing industry recognises, that unless we have effective conservation policies there will be no fish for future generations to fish. We must think of our responsibilities in the long-term as well as in the short-term.

Mr. Mark Hughes: Does the Minister accept that the Opposition understand the complexity and we do not ask him to give a blanket assistance to every part of the industry? Will the Minister also accept that this is a matter of urgency and that differential aids for different parts and types of fishing, both in financial and conservation terms, together with opening up of stocks, is the way forward to assist in this difficult position?

Mr. Buchanan-Smith: Yes, and with the previous aid schemes there was differentiation between the different size of vessels. We certainly take on board the right hon. Gentleman's point.

Agricultural Holdings

Mr. Campbell-Savours: asked the Minister of Agriculture, Fisheries and Food whether he has received


any representations from the National Farmers Union in Cumbria on the question of agricultural holdings legislation.

Mr. Peter Walker: No, Sir.

Mr. Campbell-Savours: Does the Minister accept the need to introduce a new formula for rents and at the same time to reject the Country Landowners Association proposal for an amendment to the 1976 Act? Would not the best way to secure the interest of young farmers who want to rent land be to set up a national public bank of land to provide for their particular needs?

Mr. Walker: No, Sir.

Mr. Brocklebank-Fowler: What proposals does the right hon. Gentleman have to reduce the rate of loss of agricultural land for letting in family-sized units? Will he consider the need for new tenancy legislation, including proposals for improved arbitration? Will he also consider introducing tax incentives to encourge the entry of new tenant farmers to the industry?

Mr. Walker: I am considering representations on those matters. The Chancellor of the Exchequer made some useful and helpful amendments in last year's Budget.

Animal Breeding Research Organisation

Mr. Donald Stewart: asked the Minister of Agriculture, Fisheries and Food, further to his reply to the hon. Member for Aberdeenshire, East (Mr. McQuarrie) Official Report, 22 January, c. 193, if he will undertake to consult all interested farming bodies on the provision of research on animal breeding if the Agricultural Research Council decides to close any part of the Animal Breeding Research Organisation.

Mrs. Fenner: Machinery already exists for a continuing consultation of farming interests on the provision of all agricultural research programmes.

Mr. Stewart: Is the Minister aware that the Animal Breeding Research Organisation, which has a world-wide reputation, is the only source of scientific thought on animal breeding in the United Kingdom? May we have an assurance that the Agricultural Research Council will continue a full programme of research into genetic breeding in cattle within the ABRO?

Mrs. Fenner: I assure the right hon. Gentleman that the various research projects commissioned by the Ministry with the ARC and undertaken at the ABRO are to continue, mainly at the ABRO. Discussions on details are continuing between the Agricultural Departments and the Council.

Mr. McQuarrie: Does my hon. Friend accept that the Scottish National Farmers Union has bitterly criticised the threatened closure of the ABRO in Scotland. The right hon. Member for Western Isles (Mr. Stewart) has said that it is one of the finest research organisations in the world. Does my hon. Friend agree that it is essential that animal research is retained in Scotland, since Scotland is so dependent on agriculture for its livelihood?

Mrs. Fenner: I note what my hon. Friend says. I can assure him that the ARC has not made a final decision. A final decision is expected at its meeting on 23 March.

Mr. Ashton: When the Minister has talks about animal breeding will she talk to Mr. Bernard Matthews, the

millionaire turkey breeder from Norfolk, who has been paying his workers £72 a week for working in dirty, bloodstained conditions cutting the throats of turkeys, and allowing them three minutes to use the lavatory or fining them 15 minutes' pay if they take longer? How much subsidy does he get?

Mrs. Fenner: That question is not even loosely connected with the Agricultural Research Council.

Mr. Cockeram: Will my hon. Friend bear in mind representations that I have made to her and my right hon. Friend the Minister on behalf of Shrophire farmers, who believe that to close the Animal Breeding Research Organisation would be a great mistake, because of its invaluable contribution to agriculture?

Mrs. Fenner: My hon. Friend will have observed that the ARC recently made it clear in its press notice of 19 February that it appreciates the continuing need for scientific support for the livestock breeding industry.

Mr. Strang: Is the Minister aware that, contrary to press reports, the revised ARC proposal would mean that the expenditure and staff at the ABRO would be cut by more than 50 per cent? We welcome the Ministry of Agriculture's decision to continue commissioning its work, but may I ask the Minister to tell the ARC that it must desist from sabotaging this internationally famous research station and provide the necessary money to support fundamental research?

Mrs. Fenner: The hon. Gentleman will know that the ARC comes within the aegis of the Department of Education and Science. The question of redundancies and management is for the ARC.

North Atlantic Salmon Conservation Agency

Sir Hector Monro: asked the Minister of Agriculture, Fisheries and Food when the North Atlantic Salmon Conservation Agency will move to Edinburgh; and if he will make a statement.

Mr. Buchanan-Smith: I hope that the convention for the conservation of salmon in the North Atlantic ocean can come into force during the course of the year, but this must depend on the speed at which the prospective parties to the convention ratify it. I am very pleased that the new organisation will have its headquarters in Edinburgh

Sir Hector Monro: Is my right hon. Friend aware that the House will wish to congratulate the Minister on bringing the agency to Edinburgh? When does the Minister hope that the other participants will sign the convention? Does he hold out any long-term hopes for improved salmon stocks in the United Kingdom?

Mr. Buchanan-Smith: Edinburgh is an appropriate headquarters for the organisation. I am glad that we had the support of other countries in the negotiations. The convention was opened for signature only on 2 March. It might take a little time before the signatures are completed. I hope that the process will proceed as expeditiously as possible.

Mr. Skinner: Is the North Atlantic Salmon Conservation Agency a quango?

Mr. Buchanan-Smith: No, Sir.

Mr. John MacKay: Has my right hon. Friend considered the implications of the vote in Greenland to


leave the Common Market and the consequences of that for the conservation of North Atlantic salmon? May we have an assurance that in negotiations with Greenland over its leaving the Common Market it will be made clear that if Greenland wishes to seek an advantageous relationship with the Common Market it will have to give categoric assurances that its fishermen will not act as high sea pirates of salmon that rightly belong to countries such as Britain?

Mr. Buchanan-Smith: As my hon. Friend knows, Denmark has acted on behalf of Greenland in the negotiations. I understand that it continues to do that in relation to external affairs. I share my hon. Friend's concern. If we are to preserve and husband the important salmon resource, it is vital that we have better controls over high sea salmon fishing.

Common Fisheries Policy

Mr. Michael Shaw: asked the Minister of Agriculture, Fisheries and Food what stage has been reached in negotiations for a common fisheries policy.

Mr. Hicks: asked the Minister of Agriculture, Fisheries and Food what is the current position in respect of the negotiations for a revised European Economic Community common fisheries policy.

Mr. Buchanan-Smith: Progress has been made on marketing, on conservation and on the Community's reciprocal fishing arrangements with third countries.

Mr. Shaw: Is my right hon. Friend aware that, although the need for certainty over the future of the fishing industry is urgent, it would be nothing but a hindrance to the successful conclusion of negotiations if a time limit were publicly placed upon the negotiations?

Mr. Buchanan-Smith: It is extremely important for the negotiations to proceed as expeditiously and constructively as possible. That is important not only to our fishermen but for the proper management of the resources in the sea.

Mr. Hicks: Is my right hon. Friend aware of the increasing anxieties of inshore fishermen in the far southwest about the future status of the 6 to 12-mile bands once a common fisheries policy is obtained? Is he aware that local fishermen believe that in future that area should be fished exclusively by United Kingdom fishermen?

Mr. Buchanan-Smith: I am aware of that. My hon. Friend has been vigorous in the House in expressing that view. Our objective is to obtain a 12-mile exclusive zone. In the negotiations it is necessary to take account of the historic rights of people who have fished in that area. That we have not reached a conclusion to the negotiations yet is a sign that we are not prepared to settle for just any settlement.

Mr. James Johnson: Earlier the Minister said that he had met the industry's leaders on 17 February. Is he aware that the leaders met hon. Members in Westminster Hall before he met them, when there was an air of solid, 100 per cent. inspissated gloom? Did the Minister manage to convert them? Were they persuaded by what he said about the common fisheries policy?

Mr. Buchanan-Smith: Of course the fishing industry is anxious about its future, just as the Government are anxious about its future—[Interruption.]—I share the hon.

Gentleman's genuine concern about the opportunities that our fishermen will enjoy. That is why it is important to get the right settlement. The fishing organisations have been represented throughout the negotiations and we shall consult them fully before any conclusion is reached.

Mr. Warren: I assure the Minister that this Government have a future. During that future will he press on with determined negotiations with the European Community, and, in those negotiations, make sure that we have beam trawling regulations that are no less favourable to our fishermen than they are to those on the other side of the North Sea and the Channel?

Mr. Buchanan-Smith: The fishing industry would have been perfectly justified in wondering whether it had any future under the Labour Government. From this Government it has received considerable aid and considerable progress has been made in many aspects of the common fisheries policy, such as those that I mentioned, including marketing and conservation. In answer to the specific matter that my hon. Friend raised, we have issued a consultation document, and I am considering the representations that have been made following those consultations.

Mr. Buchan: Does the Minister realise that our only anxiety about the future of this Government is that it should be as short as possible? It has already been pretty nasty and brutish, for a start. May I draw the right hon. Gentleman's attention to the future of the British fishing industry, instead? Time is running out. We are moving into dangerous waters and, by the way, we are not leaving ourselves many dangerous waters to get into. Will the Minister assure us that there will be no agreement short of a 12-mile exclusive and a 50-mile dominant preference? Will he follow the excellent example of Greenland and get out of the market so that we may settle our own water limits?

Mr. Buchanan-Smith: I should have more respect for the hon. Gentleman's comments if he at least acknowledged the progress that has been made and the way in which this Government have helped the industry. Instead of being a prophet of gloom, he should show a constructive, not a destructive, spirit. Then I would more easily appreciate what he says.

Laying Hens

Mr. Thomas Cox: asked the Minister of Agriculture, Fisheries and Food what is the present number of laying hens kept in battery cages in the United Kingdom.

Mrs. Fenner: Precise figures are not available. The 1981 June census indicated that the United Kingdom laying flock totalled 44·5 million birds. It is estimated that 95 per cent. of these are kept in battery cages.

Mr. Cox: Is the Parliamentary Secretary aware of the deep concern that is felt by many people about the treatment of animals that are kept in battery conditions? When will the Government introduce new legislation, or is this yet another example of Britain having to follow the rules that are laid down for this country by the EEC?

Mrs. Fenner: In many ways this country has led the EEC in matters of animal and poultry welfare. The Council of Agriculture Ministers has already agreed a


large part of the draft directive. However, it must await the opinion of the European Parliament before reaching a final decision on stocking densities and implementation dates.

Mr. Marlow: Does my hon. Friend mean the European Assembly?

Mrs. Fenner: I mean the European Parliament.

Mr. Hardy: Has the Ministry any information about the number of birds that are kept in cages with four or fewer birds per battery, and the number where there are seven birds per battery? Is it possible to compare the incidence of stress in those cases and the improved yield that is available where fewer birds are kept?

Mrs. Fenner: A great deal of research is currently being carried out on the effect on birds that are kept in battery cages, both in other European countries and here. The hon. Gentleman will know that we have proposed the two-tier approach in Europe—450 sq cm per bird at the first stage, and 600 sq cm per bird at the second stage.

Beef Herd

Mr. Knox: asked the Minister of Agriculture, Fisheries and Food if, in view of the decline in the beef herd of 3½ per cent. in each of the last two years, he will take steps to arrest that decline.

Mr. Buchanan-Smith: Beef producers' returns have recovered during the past year, and there are now signs that the decline in the beef herd is slowing down. Further measures to assist beef producers will be considered in the common agricultural policy price negotiations.

Mr. Knox: Will my right hon. Friend ensure that there is no reduction in the Buckler cow premium this year?

Mr. Buchanan-Smith: There is no doubt that the help that is given through that premium and the hill livestock compensatory amounts that the Government have consistently increased are of great importance to our beef producers.

Mr. Mark Hughes: Will the Minister consider extending less-favoured area status, at a lower level of assistance, to those areas where the beef herd, in particular, could be assisted by aid within the rules of the Common Market, without upsetting the susceptibilities of the French or anyone else?

Mr. Buchanan-Smith: As the hon. Gentleman knows, this is one of the aspects to be looked at in the marginal land survey, on which this country has moved particularly fast.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Straw: asked the Prime Minister if she will list her official engagements for 4 March.

The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. Straw: Is the Prime Minister aware that mealy-mouthed, half-hearted, fence-sitting comments in the House on Tuesday and in a written answer yesterday

strongly suggest to the world that, whatever her Minister with responsibility for sport and the Foreign Secretary may say or think, she privately condones this tour and the racist regime in South Africa? To clear the air, will she now give a straight answer to a straight question: does she condemn this tour? "Yes" or "No"?

The Prime Minister: I am not mealy-mouthed about upholding the Gleneagles agreement or about the right of freedom of people in this country to travel. Both are very important indeed. I have given a written answer. I have nothing further to add. I endorse what my right hon. Friend the Foreign Secretary said today, that he thinks that perhaps this tour is a mistake.

Sir William Clark: Will my right hon. Friend today consider the effect of a £9 billion reflationary Budget next week? Does she agree that if there were such a Budget the public sector borrowing requirement would go up by at least £6 billion, which would increase the interest paid, and that that would hit industry, jobs, and so on? Does she further agree that every one point increase in interest charges means that the cost of the national debt goes up by £1,000 million per annum?

The Prime Minister: I entirely agree with my hon. Friend that if an increase in expenditure of that amount were put on to the borrowing requirement, interest rates would go up very sharply. I cannot confirm my hon. Friend's figures, but I share his general view, and I can say that the payments of interest on debt have gone up enormously. They were about £2 billion in 1970. This year they are ?15 billion, which is more than we spend on either national health or education.

Mr. Foot: I come back to the answer that the right hon. Lady gave a minute or two ago about the cricket tour. Does she not now appreciate that the answer that she gave on Tuesday, far from assisting the situation, only made it worse, and that her further equivocal answer here today continues to make the situation worse? Can she say , without any equivocation, that she entirely agrees with what the Foreign Secretary said on the matter and repudiates what her Back Benchers have, said on the matter?

The Prime Minister: The right hon. Gentleman cannot have been listening. In my last reply I endorsed what my right hon. and noble Friend the Foreign Secretary said on the matter.

Mr. Hannam: Will my right hon. Friend take time today to remind the country that Britain and the United States are the only two major countries that had lower inflation in 1981 than in 1979?

The Prime Minister: Some figures have recently been released. What my hon. Friend says is true in relation to the end of 1981 compared with the end of 1979.

Mr. Bob Dunn: asked the Prime Minister if she will list her official engagements for Thursday 4 March.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Dunn: Does my right hon. Friend accept that the declaration of nuclear-free zones by the GLC and other Labour-controlled local authorities will be construed only as a sign of weakness by our enemies? Does she agree that it is amazing how few people, especially among those on


the Opposition Benches, are prepared to learn from the lessons of East Germany, Czechoslovakia, Hungary, Poland and Afghanistan?

The Prime Minister: I agree totally with my hon. Friend. The policy of nuclear deterrence has kept Britain in peace for 30 years. To abandon that policy now, just when the threat to freedom is acute and powerful, would be the height of irresponsibility.

Mr. Litherland: Does the Prime Minister agree that, with the millions of bricks that are being stockpiled, the thousands of construction workers on the dole and the millions remaining on housing waiting lists or living in substandard housing, her policy is one of shame and failure and calls for a debate in the House or the resignation of the Secretary of State for the Environment?

The Prime Minister: We have housing debates from time to time and we shall have them in future. Many of us would wish to see a greater proportion of public spending directed to capital expenditure. Most of the demands that we get are for increases in current expenditure. Local authorities this year have substantially underspent their capital allocations.

Mr. Churchill: May I congratulate my right hon. Friend on taking the initiative among the oil-producing nations to procure a sharp downward trend in oil prices? Does she agree that this step provides Great Britain and the entire Western industrialised world with the opportunity to break out of the, vicious economic circle of recent years into what lain Macleod called the "virtuous circle" in which lower inflation leads to economic expansion, generating greater resources and savings, which in turn lead to lower taxation?

The Prime Minister: The price of North Sea oil has decreased by about $4 a barrel. This is very good news for industry as it will lower industrial costs and help to reduce inflation. It is good news also for increasing world trade, as money that would otherwise have been spent on oil will now be available for the purchase of other goods, and our industry is now in a good position to take advantage of that expansion.

Mr. Barry Jones: asked the Prime Minister what are her official engagements for 4 March.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Jones: What will the right hon. Lady do to end the humiliation and the despair of the long-term unemployed? Is she aware that many men over the age of 50 fear that they might never work again? Does she understand that much of the desperate competition for the Nissan development stems from the fact that five of the British regions have unemployment of over 17 per cent?

The Prime Minister: I know of the hon. Gentleman's interest in trying to secure the Nissan development for his constituency, should it come to this country. That has not yet been finally decided. As he will be the first to recognise, the ending of long-term unemployment will stem only from creating new industries. The Department of Industry is doing a great deal to support the creation of new industries and small business—or the expansion of existing ones. We hope that from the recent fall in oil prices we shall be in a position to try to get some more

expansion. We shall continue our policy of supporting and encouraging the development of new industries and expanding small businesses.

Mr. Beaumont-Dark: Will my right hon. Friend spare a moment today to congratulate the Leader of the Opposition on being reselected for Ebbw Vale, something which many of his distinguished colleagues seem unable to do in their constituencies?

The Prime Minister: I do so gladly. I hope that the right hon. Gentleman keeps his position as Leader of the Opposition for many years to come.

Mr. George Cunningham: Has the Prime Minister noticed recently that, contrary to the law of the European Community, the French have been subsidising their farmers? Rather than attack the French for doing that, will she join forces with them? Only if members are prepared to support their individual economies in that way has the Community any chance of surviving.

The Prime Minister: If we get into a position where we have competitive subsidies, Britain may in the end lose. I think that it is a far better policy to try to secure the reduction of national aids and subsidies of the sort that France is applying. As the hon. Gentleman knows, France has been referred to the European Court over this policy.

Mr. Fairbairn: Will my right hon. Friend take time today to note that British Airways on its 14 Scottish Highlands and Islands air routes has been able to dispense with two-thirds of its staff without affecting the service, thus changing a prospective £6·5 million loss to a £1 million profit? Will she take steps to ensure that all nationalised industries do the same so that private industry can fund real jobs and not be forced to sustain imaginary ones?

The Prime Minister: That sounds an excellent example of reducing overmanning and turning a loss into profit. I hope that it will be pursued throughout British Airways to the great advantage of both British Airways and the British taxpayer. I congratulate British Airways on its achievement.

Mr. Kilroy-Silk: Did the right hon. Lady's earlier reply to my right hon. Friend the Leader of the Opposition mean that she condemns the cricket tour of South Africa and those of her hon. Friends who support it?

The Prime Minister: I have answered so many questions—[HON. MEMBERS: "Answer".]—on this issue. I have nothing to add to the answers that I have given.

Mr. John Townend: asked the Prime Minister if she will list her official engagements for 4 March.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Townend: Is my right hon. Friend aware of the growing impatience of many small business men at the reluctance of her Government either to reform or abolish wages councils? Is she further aware that they cannot understand how the Government can stand by and see jobs lost by awards which raise wage costs by 16 per cent. or more at a time when the Government are trying to restrict increases to their employees to 4 per cent.?

The Prime Minister: I know of the anger that some of the wages councils' increases have caused, especially


among a number of small businesses. My right hon. Friend the Secretary of State for Employment has recently written to two wage councils to draw their attention to this fact. I believe that we are constrained by our agreement with the ILO convention until 1985. However, we are considering the matter now.

Mr. Wellbeloved: Has the Prime Minister noted the double standards of those who pay lip-service to the condemnation of the Soviet invasion and occupation of Afghanistan while encouraging sportsmen to play on the blood-soaked playing fields of Moscow? Will she avoid making the same error by clearly condemning those who have offended every decent instinct by taking their cricket bats to South Africa?

The Prime Minister: We endeavour to apply the same rules. We try to dissuade sportsmen from going to events that we think are contrary to the Gleneagles agreement or, in the case of Afghanistan, those that will give aid and comfort to Soviet Russia. We try to dissuade in both cases, but in the end we accept that our only powers are those of persuasion and that ultimately people are free to decide for themselves.

Mr. John MacKay: asked the Prime Minister if she will list her official engagements for Thursday 4 March.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. MacKay: Did my right hon. Friend have time to notice that last weekend the Liberal Party council voted against the Government's Employment Bill? Does not that cause further confusion over the so-called "Alliance"—some are for it, some are against it and some do not know? Should not the electors of Hillhead notice that the alliance party not only faces both ways but in all directions at the same time?

The Prime Minister: I entirely agree with my hon. Friend. There may be confusion on those Benches, but there is none on ours. We are fully in support of the Employment Bill and we believe that the vast majority of our citizens are as well.

Mr. Meacher: Is the Prime Minister aware of today's reports that MI5 has set up a gigantic secret State data bank in Mayfair which is two and a half times the size of the already vast police national computor? Is she aware that MI5 has been given unlimited access to the files of other Government Departments, which it is using to build up a comprehensive national filing system on each individual? Is this not 1984 writ large? Will the right hon. Lady legislate to ensure that this monstrous system is checked by a proper security-cleared consultant appointed by an independent data protection authority?

The Prime Minister: The hon. Gentleman knows that it is the practice—long hallowed by all parties—not to comment from this Dispatch Box on matters of security.

Business of the House

Mr. Michael Foot: Will the Leader of the House state the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Francis Pym): Yes, Sir. The business for next week will be as follows:
MONDAY 8 MARCH—Consideration of a timetable motion on the Oil and Gas (Enterprise) Bill.
Third Reading of the Canada Bill.
TUESDAY 9 MARCH—My right hon. and learned Friend, the Chancellor of the Exchequer, will open his Budget Statement.
The Chairman of Ways and Means has named opposed private business for consideration at 7 o'clock.
WEDNESDAY 10 MARCH and THURSDAY 11 MARCH— Continuation of the Budget debate.
FRIDAY 12 MARCH—Private Members' Motions.
MONDAY 15 MARCH—Conclusion of the debate on the Budget Statement.

For the Budget debate: relevant reports of the European Legislation Committee:— Fourth report, Session 1981–82 H.C. 21-iv, para. 2 Tenth report, Session 1981–82 H.C. 21-x, para. 1.

Mr. Foot: May I put two matters to the right hon. Gentleman? One of them arises from the answers given a moment ago by the Prime Minister on the cricket tour—[Interruption.] Some of us are deeply concerned to ensure that the Commonwealth games go ahead. Some of us have also taken account of the fact that the Foreign Secretary has made an important statement on this matter. Even if Conservative Members do not care, we think that it would be a tragedy if the Commonwealth games were to be injured or impaired. The danger is that England will be excluded from those games if the tour goes ahead. Therefore, I ask the right hon. Gentleman once again to ask the Prime Minister to come to the House at the beginning of next week and to make a fresh statement on the whole matter in the hope that we may rescue something from the situation. That is the duty of the Prime Minister, made all the more necessary by the answers that she has given throughout this week.
The right hon. Gentleman has proposed a guillotine motion on the Oil and Gas (Enterprise) Bill on Monday. This matter still deserves considerable debate in the House. Debates have been held up because the articles of association have not been produced and presented. May we have a Government statement on the subject? I do not know whether it is right to ask that the Secretary of State for Energy should make the statement, since he commands very little confidence in any quarter of the House. Since he apparently was the number one adviser to the Government on the Amnesty—I mean Amersham International scandal—[Laughter.] I know that these are laughing matters to Conservative Members. They do not give a damn what happens to the Commonwealth games. They do not give a damn what happens to Amersham International. They do not give a damn what happens to the reputation of the House. The right hon. Gentleman should hold up any proposal for imposing a guillotine until many more facts have been given to the House and to the Committee. It would be much better if the Government got a new Minister to present the Bill to the House.

Mr. Pym: The right hon. Gentleman has made some rather subjective judgments about how hon. Members feel about certain matters. However, I am sure about one thing—the right hon. Gentleman is right about the Commonwealth games. I am sure that the whole House wishes those games to go ahead as planned.
I cannot find time for a debate on the tour in South Africa. This afternoon my right hon. Friend the Prime Minister made it clear that she had answered a question on the subject yesterday. I have nothing more to add to what she said.
It is neither possible nor right for a statement to be made about the timetable motion before the debate on Monday. Obviously, all the issues surrounding the timetable motion can be discussed then. The Government feel that it is necessary, appropriate and timely to proceed with the timetable motion so that the Bill can reach the statute book in an orderly fashion.

Mr. John Carlisle: In view of the Opposition's obvious new interest in sport in South Africa, might it not be timely for my right hon. Friend to advocate a debate on the subject, particularly covering the right hon. Member for Birmingham, Small Heath (Mr. Howell), who has been absent for most of the week pursuing his sport behind the Iron Curtain, in Russia?

Mr. Pym: I cannot do that next week.

Mr. Dick Douglas: Will the right hon. Gentleman find time next week to give the House some information on any decisions that the Cabinet reached this morning on subventing in some way the operation of the smelter at Invergordon, through—if necessary—a dedicated coal-fired power station such as Kincardine in my constituency? Will the right hon. Gentleman ask the Secretary of State for Scotland to explain the position because it is important for jobs in that area?

Mr. Pym: There is no further statement in prospect.

Sir Nigel Fisher: As Monday is Commonwealth Day, may I draw my right hon. and hon. Friends' attention to early-day motions 259 and 274, which stand in the names of right hon. and hon. Members on both sides of the House?
[That this House joins with all other Commonwealth Parliaments in the observance of Commonwealth Day on 8th March, and with the work of the Commonwealth Parliamentary Association which brings together Parliamentarians who, irrespective of race, religion or culture are united by a community of interest, respect for the rule of law, individual rights and freedoms, and by the positive ideals of parliamentary democracy.]
[That this House urges continuing support for the development of the Commonwealth; and believes that due recognition should be given to Commonwealth Day on 8th March throughout the United Kingdom.]
On behalf of the Government, will my right hon. Friend endorse our continuing support for the Commonwealth and the Commonwealth Parliamentary Association?

Mr. Pym: I am delighted to endorse these motions. I am sure that the whole House will want Commonwealth day to be truly and properly celebrated. Both sides of the House attach great importance to the Commonwealth.

Mr. Jack Ashley: Is the Leader of the House aware that some of the Government's assistance for industrial development is misdirected,


because some of the areas that receive it include localities that have an unemployment rate of 5 per cent. whereas some areas that are flatly refused it—such as North Staffordshire—have three times that level of unemployment? May we have a debate next week on the Government's targetting of assistance?

Mr. Pym: It is always difficult to draw the line between those areas where assistance is appropriate and those where is is inappropriate. I cannot possibly find time next week for that debate, but I shall convey the right hon. Gentleman's views to my right hon. Friend the Secretary of State.

Mr. John Stokes: Is my right hon. Friend aware that one of our two observers at the elections in El Salvador is Sir John Galsworthy, a retired Foreign Office official who, in 1945, recommended that thousands of people should be sent back to Soviet Russia, to be shot by Stalin? Given that, is he the proper man for the job? Should not the matter be debated.

Mr. Pym: I do not think that that matter comes under the heading of business for next week.

Mr. Robert C. Brown: Will the right hon. Gentleman immediately reconsider the introduction of the guillotine motion on the Oil and Gas (Enterprise) Bill? Is the right hon. Gentleman aware that as the articles of association have not been made available to the Committee an enormous amount of time has been wasted? As a result, the part of the Bill dealing with the British Gas Corporation and North Sea safety will be neglected in debate. The right hon. Gentleman should reconsider the matter.

Mr. Pym: Clearly the safety aspect is extremely important. I think that that is in part IV, which is at the end of the Bill. It is important that there should be enough time available for those clauses to be debated properly. The Government considered carefully whether to introduce the timetable motion, and came to the conclusion that we should do so, so that the rest of the proceedings can be conducted in an orderly fashion.

Mr. Nicholas Winterton: Has my right hon. Friend seen the publicity in the press today about research assistants operating from Norman Shaw North and Norman Shaw South? Will he try to find time next week to make a statement clarifying the employment of research assistants, as many complaints are being made to Members about the presence of strange people in these buildings? Is he aware that the research assistants seem to work very strange hours, and is he concerned, as many hon. Members are, that the facilities of the House are being abused?

Mr. Pym: A number of allegations have been made. I have thought it right to institute some inquiries, which I have asked the Services Committee to undertake. There are security implications, accommodation problems and a strain on the facilities of the House. It is, therefore, an issue that requires investigation and I have set that in hand.

Mr. Andrew Faulds: Will the right hon. Gentleman seriously consider the need to find time for a debate, as my right hon. Friend the Leader of the Opposition has suggested, or at least a statement, on the bribing of British sportsmen to play in apartheid South

Africa because that would provide an opportunity for the Prime Minister to clarify her rather muddled and prejudiced mind on this matter?

Mr. Pym: My right hon. Friend the Prime Minister made her views clear in her answer yesterday. I do not think that I can find time at the moment for such a debate.

Mr. David Crouch: May I offer my right hon. Friend some discreet but well-considered advice regarding a possible statement in the near future on heavier lorries? Would he accept that that statement should be deferred until June—1984?

Mr. Pym: My right hon. Friend the Secretary of State for Transport has intimated that the House will be asked to consider that subject rather earlier. I think that we are committed to that and time is likely to be found for it this year.

Mr. J. W. Rooker: Will the right hon. Gentleman draw the attention of the Chancellor of the Exchequer to the Committee proceedings, which have now finished, on the Social Security and Housing Benefits Bill on Tuesday and Thursday this week? Is he aware that the pledge that the Prime Minister gave about maintaining long-term benefits in line with inflation has been under attack and threatened by ministerial statements in Committee? To avoid any doubt, will the Leader of the House ensure that when the Chancellor makes his statement and when the Secretary of State makes his statement on social security uprating the following day, there is no confusion in the minds of hon. Members or of our constituents about the proposed new retail price index announced by the Government in Committee which will cut £90 million from people on supplementary benefit this year?

Mr. Pym: I will, of course, convey those representations to my right hon. and learned Friend the Chancellor and my right hon. Friend the Secretary of State. However, I have no reason to suppose that the hon. Gentleman will be confused after their statements.

Mr. Michael Shersby: Will my right hon. Friend find time for an early and urgent debate on the future security of the Falklands Islands, in view of worrying statements by the Republic of Argentina about the territorial integrity of that British Crown colony?

Mr. Pym: As my hon. Friend knows, that issue has been running, relevant and topical for a number of years. I cannot find time for a debate on it in the near future, but perhaps my hon. Friend can find some other way of doing it.

Mr. Dennis Skinner: On the disposal of North Sea assets, bearing in mind that the Leader of the House is reported to be a member of Lloyd's and therefore very much involved in business deals of one kind and another, and taking account of the fact that oil is a falling market, will the right hon. Gentleman in his capacity as a member of Lloyd's advise whether it is a good time—

Mr. Speaker: Order. No Ministers answer here on professional or business activities. They answer as Ministers.

Mr. Skinner: I was merely drawing the attention of the Leader of the House to a possible contradiction in the Government disposing of oil assets when many people


outside and inside the House would say that, even if it is accepted that the assets should be disposed of, this is a crazy time to sell.

Mr. Pym: Until the House passes the Bill, we are not in a position to sell. We should have to judge the market at the time.

Mr. Clinton Davis: Reverting to the welcome announcement by the Leader of the House of a statement regarding the employment of research assistants and the clear need for guidelines to be laid down, is the right hon. Gentleman aware that there has been a great deal of unpleasant speculation and defamatory observations about decent, hard-working American students who are here to study and to help Members of Parliament? Will he make it clear in the forthcoming statement that these people should not be made scapegoats for the thoroughly inadequate research conditions and facilities available in the House?

Mr. Pym: I should not like to anticipate what may be discovered as a result of the investigations that I have set in hand, but I am certain that the matter should be looked at, if only to satisfy ourselves that in certain respects the present arrangements are satisfactory. If in other respects they are not satisfactory, we shall then be able to do something about that.

Sir Philip Goodhart: Can my right hon. Friend give an assurance that the House will have the opportunity to discuss exemptions from the wearing of seat belts in cars before legislation comes into force, as, although the legislation will undoubtedly save many lives, there are reports that exemption will be far too difficult to obtain?

Mr. Pym: I understand my hon. Friend's concern. I am confident that there will be an opportunity to debate the subject in the House before the final decision is taken. I will make sure, with my right hon. Friend the Secretary of State, that that is possible.

Mr. Thomas Cox: Is the Leader of the House aware that, after some seven years, part of Cyprus, a Commonwealth country, is still occupied by Turkish troops? As this country is one of the guarantor Powers and, sadly, yet again the intercommunal talks seem to be collapsing, when shall we have the opportunity to discuss this crucial matter in the House?

Mr. Pym: I think that it would be relevant on the next occasion that it is possible to have a foreign affairs debate. Clearly, it is an issue that one would like to see settled, but it had proved extremely difficult. The subject is constantly in the mind of my right hon. and noble Friend the Secretary of State for Foreign and Commonwealth Affairs.

Mr. Harry Greenway: In view of the nation's serious concern about the high level of violence to teachers, pupils and buildings in some schools, as evidenced at St. Saviour's School, Toxteth, and in other places, may we have an early debate on school discipline?

Mr. Pym: There have been a number of debates this Session and last Session in which that subject was

relevant. I do not foresee another occasion in the near future, although I share the anxiety of my hon. Friend and of the whole House about behaviour of this kind.

Mr. Christopher Price: When shall we have the promised White Paper on data protection? Will the Leader of the House promise that it will cover the MI5 computer in Mount Street, W1 , which, if unsupervised by some kind of parliamentary mechanism, represents a grave threat to civil liberties as it has the capacity to store information about every citizen in the country?

Mr. Pym: I think I can say that the White Paper is coming soon. I cannot say precisely when, but it will be soon. On the specific point that the hon. Gentleman has raised, as my right hon. Friend the Prime Minister said today, no Government ever make any statement or answer questions relative to the nation's security, which is quite as important as the anxieties to which the hon. Gentleman has referred. The White Paper will be forthcoming soon.

Mr. Ivan Lawrence: Is my right hon. Friend aware that the West Midlands regional health authority and the Severn-Trent water authority are about to fluoridate the water supply of 2 million inhabitants against the wishes of most of the democratically elected local authorities? Will my right hon. Friend find an early time to discuss the powers of those unelected bodies to sweep aside the democratic views of the people in matters concerning life and death?

Mr. Pym: I am sure that is an important issue, but I am afraid I cannot find Government time for such a debate.

Mr. David Winnick: Is the right hon. Gentleman aware that a Government statement or a debate is necessary about the cricketers who have gone to South Africa, in view of the Prime Minister's shameful refusal to condemn the tour? Is the right hon. Gentleman also aware that we need to know the Prime Minister's real views and whether she endorses the sentiments of the fellow travellers and apologists of apartheid on the Government Benches?

Mr. Pym: I have nothing to add to what has been said this afternoon.

Mr. Teddy Taylor: Is my right hon. Friend aware that, although there is great admiration for the way in which the police dealt with the hijacked Tanzanian airliner, there is concern in Southend and other parts of Essex that the designation of an Essex airport as a suitable landing place for hijacked airliners puts a considerable extra financial burden on the county? Are the Government willing to make a statement next week about whether this kind of financial problem should be dealt with on a national rather than a county basis?

Mr. Pym: Although I cannot promise a statement on that, I entirely agree with my hon. Friend that this incident was handled with great skill by the police force on the spot and by the chief constable of Essex, under the general direction of my right hon. Friend the Home Secretary. I appreciate my hon. Friend's concern, but I do not think there is scope for a statement.

Mr. Bob Cryer: How does the Leader of the House answer those critics who say that parliamentary democracy is a sham, when a leading journal can describe the growth of massive computer facilities at a headquarters


in Mayfair by a secret police service of which we are supposed to be rather critical and to want to hold to account, when the Prime Minister and he have refused—

Mr. Speaker: Order. May I just ask the hon. Gentleman if it is next week's business about which he is asking? There is a statement to follow.

Mr. Cryer: I am asking the Leader of the House for an urgent statement and time for a debate, but the Leader of the House has said that neither he nor the Prime Minister is prepared to comment on the MI5 computers which are being linked into other Government departments. This is a very serious matter for the freedom of the individual. They should abandon that platitudinous nonsense about not commenting on something that should be accountable to this House.

Mr. Pym: The hon. Gentleman should abandon his exaggeration. I have nothing to add to what the Prime Minister said.

Mr. Tony Marlow: Will my right hon. Friend give pleasure to both sides of the House by having an early debate on human rights, in particular, the action of the Test and County Cricket Board in threatening cricketers who are going about their lawful business in South Africa, particularly as this might be an apt matter to refer to the European Court of Human Rights?

Mr. Pym: I have nothing to add to what I already said on that subject.

Mr. Clement Freud: Will the Leader of the House find time for a short debate on the continued incarceration of Rudolph Hess? Will he accept that this man who will be 88 next month has spent 41 years in prison, most of that time in solitary confinement? Does he not think it right to urge the Foreign Secretary to make greater efforts to allow this old man to die in the dignity of his home or at least in a British military hospital?

Mr. Pym: A number of hon. Members on both sides of the House have taken a deep interest in this case, but if the hon. Gentleman wants to have a debate he must find his own occasion for it; I frankly cannot. I fully accept that there is concern on both sides about the circumstances of the individual to whom he referred.

Mr. David Ennals: An important statement was made last night on cigarette promotion in a written answer by the Secretary of State for Social Services—at a time when there was no opportunity for questions to be put by hon. Members. In view of this sneaky and unsatisfactory statement, will the Leader of the House find an early opportunity for us to discuss the Government's policy towards the tobacco industry and the dangers of smoking?

Mr. Pym: I do not accept the criticisms of the right hon. Gentleman. A great many statements are made in this House—sometimes, I think, too many—and there have certainly been a number of debates on that issue. It seems possible that the general subject might fall within the scope of the Budget debate. I do not know, but it might. At any rate, I cannot find Government time for it and the right hon. Gentleman must find another occasion.

Several Hon. Members: rose—

Mr. Speaker: I propose to call those four hon. Members who have been seeking to catch my eye.

Mr. Gary Waller: Does my right hon. Friend recall the statement you made, Mr. Speaker, on Tuesday of last week, that it was high time that the House came to a decision about open questions to the Prime Minister? As you, Mr. Speaker, have made your view abundantly clear, may I ask my right hon. Friend to provide an early opportunity for the House to debate this and other important issues of procedure?

Mr. Pym: I rather doubt a debate in the House would be the best way to approach this. Athough I will consider the possibility, I should have thought a more likely way would be to have another Select Committee on Procedure look at it, not necessarily immediately but at some time in the future when we set up a general Select Committee of that kind once again. It is always difficult to establish exactly what suits the House best in relation to Prime Minister's questions, but I agree with my hon. Friend that the present arrangements are subject to criticism and that we must find the best way, when we can, of improving it.

Mr. Guy Barnett: With regard to the replies which the right hon. Gentleman has given on the subject of the inquiry he is holding into research assistants, can he confirm to the House that contained within that inquiry will be the subject of the adequacy or inadequacy of the facilities at present available to reseach assistants of hon. Members?

Mr. Pym: Yes, I think that is relevant. I do not myself take the view that the facilities of the House ought to be expanded without limit in accordance with the demand placed upon them. We have to try to strike the right balance here. It is a relevant consideration. There has been a good deal of criticism that, in some cases, a strain is being put on the existing facilities which is not really justified by the nature of the inquiries being made. It is, therefore, in my mind, although the inquiry I am making; at the moment is more specifically directed to the complaints that I have received.

Mr. James Lamond: Do the Government take seriously the coming special session of the United Nations on disarmament? If they do, will we be given an opportunity in good time to debate the matter so that we can also discuss the inadvisability of having a NATO meeting in Europe which coincides with the special session in New York?

Mr. Pym: All sessions on disarmament and on reductions in the level of armaments are taken extremely seriously. After all, the entire objective of all Western countries is to have a lower level of armaments. One of the disappointments, decade after decade, has been that on the other side of the lion Curtain they have not been prepared to acknowledge this objective or to stop their own remorseless build-up. Such sessions are taken extremely seriously and, notwithstanding all previous disappointments, approached with hope but also with realism. There may be an opportunity in the course of a foreign affairs debate later on, or on some other occasion, of debating these matters, though not in the immediate future.

Mr. Robert Parry: The Leader of the House will have seen early-day motion 301 concerning human rights in Hong Kong, now supported by 125 Members of this House.
[That this House recognises the merit of the social and community work of Ms Christine Vertucci among the poor, the homeless, and low income groups in Hong Kong and her campaign for health and safety at work; deplores the decision of the Hong Kong Government to expel her from the Colony without giving a cause for its actions; condemns this arbitrary action and violation of human rights; and calls upon the Secretary of State for Foreign and Commonwealth Affairs to reverse that decision in order to prevent democratic, human and civil rights and freedom of speech and justice in the Colony becoming a mockery and a charade.]
Will he at some time arrange a debate on Hong Kong so that we can find out to whom the Hong Kong Government are answerable—whether it is to the Jockey Club, the Hong Kong and Shanghai Bank or this Parliament?

Mr. Pym: That matter would be relevant to a foreign affairs debate.

Ballot and Prime Ministers Questions

Mr. Speaker: I have two observations to make before I call the Secretary of State for the Home Department to make his statement.
First, I remind hon. Members that if anyone is fortunate enough to be selected in the ballot for the Adjournment debate he is not free to transfer it, at least not without some consultation with my office.
Secondly, I hope that hon. Members will desist from writing in to me asking to be called at Prime Minister's Question Time. Everyone is on an equal footing at Prime Minister's Question Time and I try to ration the number of supplementary questions as best I can by keeping a record.

Satellite Broadcasting

4 pm

The Secretary of State for the Home Department (Mr. William Whitelaw): With permission, Mr. Speaker, I will make a statement about the Government's intentions regarding the future development of direct broadcasting by satellite—DBS.
The House will recall the report of the Home Office study of DBS published last May. Reaction to that report has been largely constructive and positive. The Government now see a need for early decisions if the industrial opportunities which DBS offers this country are to be grasped in good time, in a situation in which there will be keen international competition.
The Government have therefore decided, in principle, that this country should make an early start with DBS, with the aim of having a service in operation in 1986. Because of the importance of making this early start, the Government have concluded that the best course would be to start with two channels initially; the number of channels could be increased up to the maximum of five channels permitted by international allocation, as and when demand justified it. The services would be transmitted at powers sufficient to permit both individual reception and community reception with cable distribution. I intend to make a further announcement shortly about the future role of cable.
As regards finance, the Government expect the capital cost of providing the satellite system to be found in the private sector.
On the industrial side, various interests in the aerospace and related industries have shown that they are ready to play their part in this challenging new venture, and we shall be working closely with them and with the domestic electronics industry to ensure that the economic benefits are effectively realised for the United Kingdom.
On the broadcasting side, it is clear that DBS must develop in a way that is consistent with our existing broadcasting arrangements, especially as regards supervision by a broadcasting authority and maintenance of proper programme standards. The BBC has already put forward proposals for two DBS channels. One would be a subscription service, including a substantial element of feature films and major sporting, cultural and other events not presently available for transmission on BBC 1 or BBC 2. The other would be a service which would draw on the best television programmes from around the world—and indeed from this country. This would be financed basically by licence fee revenue, which would probably include a supplemental licence fee for DBS.
The IBA and commercial television companies have also shown some interest in providing DBS services, but their plans are less well advanced. Additionally, more time will be needed to devise the right framework, which would be likely to involve legislation.
In these circumstances the Government believe that the right course, if the necessary early agreements are to be reached between satellite providers and users, is to authorise a go-ahead with the BBC proposals. However, the Government attaches importance to the participation of commercial television companies in DBS. What we are now proposing would leave ample future opportunities


open to them. The Government intend to press ahead with the necessary preparatory work, and would be ready to introduce legislation for the purpose as necessary.
Meanwhile, the immediate requirement is for the BBC and the British space industry to enter into discussions with a view to constructing and agreeing detailed proposals.
I commend these decisions to the House as a sound foundation for a development with major significance for this country's industrial and employment prospects. The House will no doubt wish to have an opportunity of discussing them. My right hon. Friend the Leader of the House will find time for an early debate.

Dr. Shirley Summerskill: We welcome the Home Secretary's statement, because satellite broadcasting will allow the BBC further to inform, educate and entertain millions of viewers, and it will provide increased job opportunities in the television, aerospace and electronics industries, but the proposals represent a significant step into a completely new and rapidly changing area of broadcasting, involving public money and an element of financial risk. Therefore, it is essential for the House to have a great deal more information than it has received today about their exact implications.
The fact that neither of the new channels will be financed out of advertising is to be warmly welcomed. Commercial interests will be absent and the BBC will continue to provide a truly public service, financed by public money. We expect a White Paper before the Government introduce any legislation on the participation of commercial television companies in satellite broadcasting.
With regard to the public money involved, it is extraordinary that the Home Secretary did not mention one figure, or even an estimate. The change will not take place until 1986, but we are talking about public licence fee money. The right hon. Gentleman said that the licence fee would finance one channel and would probably include a supplementary licence fee for DBS. What percentage increase on the present fee does he envisage that could be?
What is the right hon. Gentleman's estimate of the cost of his proposal to the BBC during the first few years, even on the basis of a calculation made as if he were starting the service today? At what stage does he expect a profit to be made? Have the Government costed the whole scheme? Will it be cost-effective? If it has not been costed, it is irresponsible of the Government to bring it forward.
With regard to the nature of the programme service to be provided on the new channels, has the Home Secretary received a positive assurance from the BBC that, with two new channels, there will be no consequent lowering of standards in the existing services, that they will not be weakened and impoverished, and that their quality and range will not be sacrificed in favour of the new channels?
We shall pursue all these matters and many others during the debate.

Mr. Whitelaw: I am grateful to the hon. Lady for her welcome on behalf of the Opposition for the basic proposition.
I emphasise the vital importance of getting ahead as fast as we can if we are to grasp industrial opportunities that will provide substantial jobs for this country—and to get ahead of our competitors. It is very important that we do that.
On the question of cost-effectiveness, the hon. Lady missed the point that the hardware will of course be provided by private industry, as has been made perfectly clear.
The BBC's first duty will continue to be to those who pay the licence fee. Naturally, no one can give detailed estimates of what will happen at the end of the negotiations, four years hence. Such estimates would be impossible to make, and if made would be largely meaningless. In the debate we shall provide all the basic figures and all the other information that we can.
The hon. Lady asked for a White Paper before legislation with regard to the independent companies. I cannot see why it should be necessary to have a White Paper on what would be technical legislation to permit the IBA another organisation or the companies to participate. I cannot give an assurance about that.
I return to the point that I hope that in all these matters the House will realise the great importance of seizing an opportunity and getting on with it.

Several Hon. Members: rose—

Mr. Speaker: Order. I hope that hon. Members will be brief. I shall allow questions to run until 4.30 pm , which should allow all those who wish to ask questions to do so.

Sir Paul Bryan: Does my right hon. Friend remember that at the time of the passage of the Broadcasting Act the Government's policy was to increase the choice of programmes by increasing the number of sources from which those programmes came? Is he now reversing that policy with a plan that puts in the hands of the BBC the overwhelmingly larger proportion of broadcasting—that is, two-thirds of all television, all of national radio and half of local radio?

Mr. Whitelaw: First, the Government are not reversing anything. The companies are already engaged in a new outlet in the fourth channel, which will come into effect very shortly.
Secondly, as I made clear, there should be an opportunity for commercial interests and companies to enter this area. We believe that the BBC has put forward its detailed proposals far ahead of anybody else. It is in a position to sign up with those who will provide the hardware, and we believe that it is in the country's interest that it should do so.

Sir Harold Wilson: We welcome the right hon. Gentleman's statement as giving British satellite technology and programmes a great boost; and his assurance that there will be a full debate on the allocation of satellite channels before any final decisions are taken is a wise decision. Is he aware that the committee appointed by the previous Government, which I chaired, and which first brought the issue of broadcasting satellites to the notice of the House and the country, warned—I am sure that he is aware of the warning—of the imminent threat to our domestic screens by well prepared and rapacious private operators—pirate operators? Although the right hon. Gentleman has given a hint for the future, what surprises me is the exclusion from the stage of the Government's own sponsored organisation, ITV. I take it that it is held up at the moment only by technological matters. Will he in particular express his support for the proposals for the multiplex analogue component?

Mr. Whitelaw: I am grateful to the right hon. Gentleman for his support. I fully recognise, as the Government and the House will, the contribution that he made to bringing these matters forward. I believe that the right hon. Gentleman's other points will be taken up in the debate. I fully appreciate their importance. I shall not say anything further about them today.

Sir Hugh Fraser: I am sure that the House will welcome my right hon. Friend's forward-looking statement, but it is essential that a statement is made on the cable transmission arrangements. That is as important as the statement that he has made. Great advances have been made in cable technology, but it is almost impossible for most people to receive DBS programmes unless they do so by cable. I believe that only 25 per cent. can afford it or are technically able to. I hope that my right hon. Friend will assure the House there will be a simultaneous debate on DBS and cable transmission.

Mr. Whitelaw: I entirely agree. The development of DBS and cable go hand in hand. I undertake that before we have the debate there will be a statement on cable.

Mr. Charles R. Morris: Does the Home Secretary accept that all those countries that have introduced satellite television have found that it has proved to be a financial bonanza for private cable companies? Why is the statement silent on the involvement of cable television? Can the Home Secretary take the House into his confidence and let us know how he sees the involvement of cable television in the satellite communication system?

Mr. Whitelaw: The reason why nothing about cable transmission is included in the statement is that I promised that I would make a follow-up statement on that at an early date, and I shall do so.

Sir David Price: I welcome my right hon. Friend's statement. Can he tell the House whether he will be going for the L-Sat five channel system or the ECS two channel system? If he goes for the latter and has only two channels, can he explain how he leaves room for a later contribution from the IBA? I also ask about technical standards. Is he aware that the IBA is in many ways further forward than the BBC with its MAC transmission system? I hope that he will not exclude it.

Mr. Whitelaw: It will be for the consortium that is providing the satellite to deal with technical questions. That is what will happen.

Mr. Arthur Palmer: As I understand it, the right hon. Gentleman referred to the bringing in of new private capital. What will be the exact mechanism for collecting that capital? Will it be subject to statutory control?

Mr. Whitelaw: That will be a matter for the consortium that is coming together to provide the hardware and will be negotiating with the BBC.

Mr. Kenneth Warren: To limit the service to two channels by decree from the start denies the opportunity to expand as far as it is commercially possible. Will my right hon. Friend accept the assurance that there should be no technical reason why more channels should not be available and that more companies could therefore come forward and make the whole system cheaper?

Mr. Whitelaw: As we said in our first study, we believe that it is right to make a modest start to get ahead of our competitors. There is no decree about two channels. If we can move further and faster forward, we shall do so.

Mr. Edward Lyons: I welcome the proposal, but is the right hon. Gentleman aware that it will cost a householder about £200 for a new aerial and converter, which together with the supplemental licence fee will make it very difficult to have a good home market? Will he say how he intends to create a strong home market as a platform for exports in this science-based field?

Mr. Whitelaw: It is true that cable transmission will come into this, because much of the broadcasting wll be done through cable systems. That is why cable and DBS must go together. On the point of people getting aerials, it is fair to say that the video market has been very strong indeed in the past year.

Mr. Michael Marshall: Will my right hon. Friend accept that the House warmly congratulates him on his important statement? It opens the way with cable television for communications development, which can be paralleled only by the development of the railways in the last century. Will my right hon. Friend confirm that he is inhibited today from mentioning in more detail the nature of the consortium that has put proposals to him, that there are private companies that can bring this forward at the earliest opportunity, and that that has been uppermost in his mind?

Mr. Whitelaw: I am grateful to my right hon. Friend for what he has said. I believe that the House appreciates that this development will be of great benefit to British industry and jobs. With regard to the private finance of the consortium, a great deal has already been achieved and my right hon. Friend the Secretary of State for Industry will answer further questions on that matter.

Mr. Michael English: Many of us welcome the fact that the Home Secretary has made progress on this matter, but, bearing in mind what has been said earlier, the principal cost of cable arises from tearing up our streets and it would be ludicrous if one had only four channel one-way cable, when one could have a 100 channel two-way cable.

Mr. Whitelaw: That sounds such sense that there is no reason why I should deny it. I hope that with all these details we will not lose sight of the central factor, which is that it will create opportunities for our industry and jobs.

Mr. Geoffrey Johnson Smith: Can my right hon. Friend say a further word about the BBC supplemental licence and assure the House that this does not rule out for the BBC or anyone else pay TV as a method of financing this new form of television?

Mr. Whitelaw: There was the other side to the BBC's proposals, as my hon. Friend will remember, which was through a subscription service which would go hand in hand with the other services. I am grateful for his general support and for the help that he has given.

Mr. Clement Freud: We welcome the basic proposition and the promise of a full debate, in which we hope the Government will justify the allocation of two channels to the BBC and none to ITV, but will the right


hon. Gentleman assure the House that in the four-year run up to DBS he will give full support to the four terrestrial channels which exist now?

Mr. Whitelaw: The hon. Gentleman asks why the BBC is going forward. I hope that I made it clear that its proposals are well advanced and that it can sign up the companies now. The IBA can take the opportunity when further proposals are put forward. It would, of course, require legislation to do so.

Mr. John H. Osborn: Will my right hon. Friend bear in mind that the most important things are compatibility and adequate standards, because we shall be sharing many of the facilities with the EEC and Council of Europe countries? The Commissioners, the European Council and the Council of Europe have looked at it.
Will my right hon. Friend assure the House that the standards will be adequate and that a proper definition will be made, because to go ahead with the wrong standards would be too costly?

Mr. Whitelaw: We shall maintain standards as far as it is in our power to do so. If we were to wait for the various matters concerning joint European standard to be drawn up, we might very easily miss industrial opportunities.

Several Hon. Members: rose—

Mr. Speaker: Order. I propose to call only those hon. Members who have been rising in their places. The hon. Member for Bolsover (Mr. Skinner) only just got in.

Mr. Dennis Skinner: Is the Home Secretary aware that the longer I have listened to the questions that he has been asked, the more I have become convinced that there might be a little sense in this idea? However, will he give us a guarantee that he will not make Sir William Rees-Mogg the head of this quango?

Mr. Whitelaw: The only moment when I might have doubts about the wisdom of what I am doing is when the hon. Gentleman begins to believe that I might be right. However, I am glad to have even him on board. I do not think that the question of Sir William Rees-Mogg arises on this question.

Mr. John Butcher: I congratulate my right hon. Friend on his initiative. May I press him a little further on what he meant by proceeding with the greatest urgency? Does he agree that unless the programme is expanded, accelerated and further deregulated, we may miss a great opportunity in this country, where we have much innate talent, not just in the provision of programmes, but in fibre optic cabling? If he

were to proceed with the greatest possible urgency we would see the infusion of massive amounts of private sector money into a huge cable network programme, with great implications for job prospects and exports.

Mr. Whitelaw: I am sure that my hon. Friend is right. He will be the first to appreciate that that matter arises with regard to cabling. I hope that I shall be able to make that statement shortly.

Mr. Michael Morris: In his discussions with the IBA, will my right hon. Friend ensure that not just the existing ITV companies are considered but the whole spectrum of other commercial interests are taken into consideration?

Mr. Whitelaw: That raises the problem that, if we are to make an immediate start and sign up with the consortium, only the BBC will be able to take part at present. A great deal of other preparatory work would have to be done before we could make any other advance.

Mr. Tim Brinton: I congratulate my right hon. Friend on his statement and on stressing the urgency of the matter, but I notice that his entire statement was based on the similarity between cable television and broadcasting as we know it. Has he considered that the moment a signal is transmitted, either in scrambled form from a satellite or down a wire, it becomes a service that is much more similar to the telephone than to broadcasting? Therefore, many of the conditions of broadcasting today may not apply.

Mr. Whitelaw: That may be so as the development continues. However, it is still important for this country to seek to preserve its standards of broadcasting, which are among the highest in the world. We want to keep it that way.

Mr. James Hill: I am sure that my right hon. Friend realises that his statement today is historic and that it is a great leap forward in communications. Will he acknowledge that, were it not for the successful work done by the European Space Agency, particularly in rockets, and the fine research and development by the European consortium, which the United Kingdom helped with funding, this announcement would have been long delayed? There was a debate in Paris in December by the Western European Union on coaxial television and satellite broadcasting, which highlighted most of the legal difficulties. There is a minefield of legal difficulties. I am sure that my right hon. Friend would be only too pleased to read the document.

Mr. Whitelaw: I recognise the contribution that has been made by the European space programme and all the agencies concerned.

BILL PRESENTED

FOREIGN NUCLEAR CHEMICAL AND BIOLOGICAL BASES (PROHIBITION)

Mr. Tony Benn, supported by Mr. Frank Allaun, Mr. Norman Atkinson, Mr. Robin F. Cook, Mr. Bob Cryer, Mr. Joan Evans, Mr. Stuart Holland, Miss Joan Maynard, Mr. Ian Mikardo, Mr. Stan Newens, Miss Jo Richardson, and Mr. Stan Thorne, presented a Bill to prohibit by law the siting of nuclear, chemical and bioligical weapons under the ownership or control or joint control of foreign countries within the United Kingdom, the British Isles or British territorial waters or British airspace or bases; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 78.]

Mr. Michael Hamilton: On a point of order, Mr. Speaker. The House recognises that the Bill that has been presented stands no prospect of reaching the statute book. Moreover, the House agrees that it stands not the slightest prospect of ever being debated. Therefore, I wonder whether the Select Committee on Procedure might by invited to consider, with the other points that were raised earlier today, whether this meaningless practice should continue.

Mr. Speaker: We need not argue about that. The right hon. Member for Bristol, South-East (Mr. Benn) was well within his rights. If the Select Committee is ever set up, it will have plenty of matters to consider.

Orders of the Day — Coal Industry Bill

Not amended, considered.

The Under-Secretary of State for Energy (Mr. John Moore): I beg to move, That the Bill be now read the Third time.
I have no wish to take up the time of the House by repeating in detail the points that were made on Second Reading. On that occasion, and subsequently in our sittings in Committee, we have enjoyed excellent and full debates on the Bill and on what it implies for the future of the coal industry.
I have listened with attention and with great interest to the points that have been made by hon. Members who have had such a wealth of experience in the industry. Their speeches have revealed not only their great knowledge of the industry, but their concern about its future and the role that it can play in the nation's economy. I know that the hon. Member for Midlothian (Mr. Eadie) acknowledges that we share an interest in the industry's future prosperity and economic viability, and a concern that the National Coal Board should play its full part in meeting our future energy needs. The Bill that is before the House will help us to lay down the financial framework for the industry within which our common objectives can be met.
This is neither the time nor the place to dwell on the various individual concerns that many of us have about particular aspects of the NCB's business. I think that it would be helpful, however, if I were to explain why we can have reason for confidence in the industry's future potential and spell out what has to be done to ensure that it gets on the right course. It is not, and it could not be, the Government's job to run the pits and attempt to manage the board's day to day operations; but it is our job to make sure that the board's finances are sound, and that it is working to the correct financial guidelines.
Successive Governments have given their support and demonstrated their commitment to the coal industry. It was under the previous Conservative Administration that much of the groundwork was done for the NCB's "Plan for Coal," to which the Labour Government gave their commitment in 1974. The commitment of this Government has been expressed in the Coal Industry Act 1980 and in this Bill: we are continuing to make substantial sums of public money available to fund the board's investment and to support its operation and revenues.
The increase in the board's borrowing powers that the Bill proposes should be sufficient to sustain the board's capital investment programme at an appropriate level until 1983–84. The NCB's capital expenditure approval for 1982–83, at £886 million, will ensure that their substantial investment programme of £805 million this year continues at broadly the same level.
The increase in the limits on operating and deficit grants proposed in the Bill should again be sufficient to meet the board's needs to 1983–84. The Bill will also make continuing provision for social grants, which help the industry to alleviate the enormous burdens of the past.
The justification for the level of commitment that the Government are giving in terms of cash is our belief that


the industry can have a secure and prosperous future. However, the attainment of that goal will require much effort, from employees at all levels. The NCB needs to deal with, and overcome, a number of real and difficult problems.
First, we have to understand that coal production is not an end in itself. I quote the right hon. Member for Bristol, South-East (Mr. Benn), then Secretary of State for Energy, during the Second Reading debate on the Bill which became the National Coal Board (Finance) Act 1976:
It is not meaningful in energy policy terms for a Minister to hold a self-contained discussion with the coal industry, the oil industry, or any other industry, without regard to the market possibilities which may exist for its products".—[Official Report, 27 November 1975; Vol. 901, c. 1065.]
I agree with what the right hon. Gentleman said, as will all who realise that industry, whether in the private or public sectors, has to operate commercially—and win customers—if it is to succeed. In short, the need is not simply for more coal, but to expand existing markets and to find new ones, and to supply them with coal at competitive prices. A lot more can be done, especially in the industrial market; but coal does not have a monopoly—it has to compete with other fuels on commercial terms. In the longer term there are further possibilities, in the supply of feedstock for chemical plants, and also in other markets.
Secondly, coal needs to earn its living in its markets. This means being economic and competitive, and requires a continuing effort to reduce costs, increase efficiency and maintain reliability and security of supply.
If the industry is to get by on its own commercial merit, it must continue the progress which has been made in equipping itself as a modern industry, with efficient plant operated in an efficient way, improved working conditions, and no longer being held back by a tail of very high cost and uneconomic capacity; offering itself as ready for expansion to meet our energy needs in an efficient and cost-effective way.
Pit closures are, of course, inevitable in an extractive industry. However, providing that the industry can seize the opportunities for growth which are available to it, there would be a corresponding need for opening new capacity at both new and existing mines. This is the pattern which "Plan for Coal" envisaged, though it is now clear that the opportunities for coal are some years farther off than "Plan for Coal" envisaged, and that the industry will have to strive vigorously to reach these opportunities.
If new development is to continue, and if the industry is to take advantage of opportunities, the National Coal Board needs to be placed on a sound and firm financial footing. An industry based on financial viability and profitable growth, and which is able to earn a real rate of return on its investments, can ensure its own prosperity, and a secure future.
I would not wish, however, to give the House the impression that the board's financial difficulties can be solved quickly or easily. Its problems are very real ones, and many are deep-rooted. A lot of effort will be needed from all who work in the industry to solve those problems, improve performance, and help to establish a sound financial footing for the board. In so doing, the board's employees will demonstrate, as I believe they are now doing, that they want to have a secure future in an independent, viable industry, free from State subsidy,

which will be capable of making a positive real return on the huge sums of public money invested in it and of meeting, at competitive prices, the nation's demand for coal.
The main areas where concerted efforts are required are evident. The NCB's total costs have risen by an average 4 per cent. a year above the level of inflation in the five years from 1976–77. There needs to be constant effort to keep overall unit costs down.
Productivity also needs to be improved. The 3 per cent. improvement in output per man-shift so far this year is encouraging, but needs to be seen in the context of very disappointing performance over the previous decade, when there was no real or consistent improvement. If the productivity levels envisaged in "Plan for Coal" had been achieved, output per man-shift would have been 25 per cent. better today than it actually is.
Moreover, the effect on the board's finances of the recent improvements in productivity has been more than offset by falls in the NCB's sales and a corresponding increase in stocks. Of course, the fall in energy demand is a factor beyond the NCB's control; but the setbacks in the home market, particularly in the industrial sector, which has shrunk by nearly a quarter in two years, serve to emphasise the need for the board to make a real marketing effort, the main selling point of which must be the competitive pricing of the coal along with reliability of supply.
Finally, the board needs to demonstrate judicious management of the resources that are available to it, and, in particular, ensure that its investment projects are sound and likely to produce an adequate return.
Anyone who has had experience of the coal industry can readily bear witness to the quality of its management and the dedication of its workforce. I am confident, therefore, that the industry is more than equal to the challenges that it faces, and I am sure that it will succeed. The Government's confidence is reflected in the Bill, which seeks to help the board towards its objectives of being a business-like and modern industry. However, the Government can only set guidelines for the industry and create the financial background against which it operates. The industry itself must seize the opportunities which are available and put effort into achieving success.
I ask the House to reject the Opposition motion and to give the Bill a Third Reading.

Mr. Alex Eadie: Had the Under-Secretary wanted to make some comments about the industry's productivity record, particularly over the past 10 years, he might, appropriately, have touched on how it has been starved of investment. I put that point on the record.
I do not intend in any way to minimise the importance of this Third Reading debate because changes related to moneys have occurred since the Second Reading and Committee stages, not concerned with the amount of money, but with its implications. The Under-Secretary will recall that we said we wanted to comment again on some issues when the Bill returned to the Floor of the House, based on his replies in Committee.
Although the Under-Secretary did not make a meal of efficiency, he made some relevant comments in his introductory speech. Efficiency perhaps best illustrates how the situation has changed; it shows how investment


in the coal industry pays off. The Minister will be the first to concede that it is now beginning to pay off and it was for that reason that I made my earlier comment about 10 years of practically no investment.
When referring to rising efficiency and investment, I am entitled to remind the House that the investment we are talking about paying off was the investment of the last Labour Government. However, things operate in that way because of the long lead times associated with mining development. Therefore, on Third Reading, we are, to some extent, debating the legacy of a future Government; this Government's mandate will be exhaused by that time.
Can the Government say how many new pit sinkings have occurred since they came to office? They have been in office for almost three years and I wonder how many new: pit sinkings they have pushed forward.
The Under-Secretary referred to the industry's efficiency or, perhaps, to the rising efficiency. By its own efforts, the coal industry is justifying the investment of public money that the Bill makes possible. Efficiency is rising, as is shown by the trend in productivity. In other words, output per man-shift is increasing—February was the best month the industry has ever had. Despite the effects on pits of the stoppages on the railways and the almost unprecedented weather, which also interrupted coal movement, output per man-shift for all employed at collieries was 2·51 tonnes—3·3 per cent. better than in February 1981. A fortnightly figure at that time was 2·54 tonnes—within touching distance of the all-time weekly record of 2·55 tonnes set last November.
The improvement is due to combined efforts of men, unions and management, and to the investment put into the industry under "Plan for Coal", worked out in 1974 by the Labour Government and the industry. The recent results, good as they are, will prove to be only the first fruits of our policy.
Another aspect of efficiency is safety. I raise that aspect for two reasons. First, because we were previously meeting in the shadow of the ignition that occurred at the Cardowan colliery, which was, happily, less serious than we first thought. Nevertheless, I put on record that the miners in that colliery, with the backing of the NUM, reported for work the next day; the pit was working except for the district affected by the ignition. I doubt whether many industries in Britain could claim that sort of record.
My second reason for raising the issue of safety is that a report appeared in The Sunday Times last month to the effect that fatal accidents in the coal mining industry had increased by 25 per cent. since the introduction of the productivity incentive scheme in 1978. Every fatal accident in the mining industry is one too many. I say that with some feeling. My father was killed in the pits. The statement in The Sunday Times, a trailer to the BBC 2 "Open Door" programme, is, however, untrue.
The number of fatalities in 1978 was 53, in 1979, 46, in 1980, 42, and in 1981, 35—the lowest ever recorded. That is still 35 too many. Every serious accident, even if it does not lead to death, is a tragedy for the man concerned and his family. There can never be any letting up in the drive for still better standards. It is good to see that progress is being made. As the Opposition have remarked many times, an efficient pit is a safe pit.
The public also want to see a safer industry. The capital investment directed towards the industry is helping to

produce one. It is essential to provide the resources to enable "Plan for Coal" to continue. The industry is doing its share. Opposition Members have already referred on Second Reading and in Committee to what have been described as subsidies to the coal industry. Government Ministers have got this matter wrong. I remarked on Second Reading that my hon. Friends and I hoped to torpedo for all time the argument that the mining industry is being subsidised.
I am sorry that the Under-Secretary of State figures among Government spokesmen who often talk unfairly about the subsidies provided for the coal industry. The payments are not generous when compared with those made by the German, French and Belgian Governments. Both sides of the matter should be studied more closely. The Under-Secretary of State stated in Committee that the Government were providing grants totalling £380 million in 1981–82, together with about £100 million for social grants.
There are good, humane reasons for the social grants, which cover payments for pneumoconiosis compensation, pensions and redundancy. I wish to concentrate on the remaining £380 million. This is almost the same amount that the industry will pay on money that has been borrowed. This year it amounts to £360 million or, expressed another way, £3 on every tonne of coal produced. The industry will receive with one hand £380 million from the Exchequer and pay back with the other hand £360 million.
I must point out to the Prime Minister that by far the greater part of the industry's external financing limit relates to money borrowed for investment in productive capacity. The £360 million interest payment shows that the nation is getting a return on the capital that was loaned. However, the Prime Minister always tries to give the impression that the whole amount is a one-way subsidy. Either she does not understand, or she is being deliberately unfair.
The nationalised industries, and, in particular, this great coal industry of ours, are not a burden on the national economy. The money provided by the Bill is creating a successful, wholly indigenous and secure energy supply. The present world-wide recession has been caused by the huge increase in oil prices since 1974. We have surely learnt that we must never again allow ourselves to become dependent on supplies of energy from abroad, especially from politically unstable areas such as the Middle East. My hon. Friends, I am sure, will endorse my declaration that a healthy coal industry is the one way of making sure that we can avoid repeating the folly that I have described.
I wish to turn now to the Vale of Belvoir, which has already been discussed on Second Reading and in Committee. I promised the Minister that the Opposition would return to the matter following the unsatisfactory replies that we received. We asked whether moneys provided by the Bill made provision for the Vale of Belvoir. What do the Government expect us to believe is happening when their bland reply is that this is a matter for the Secretary of State for the Environment?
We are asked to believe that Ministers within the Department of Energy, responsible for energy provision, are sitting with their feet up on the mantelpiece waiting for the Department of the Environment to reach decisions. We are asked to believe that there is no collective responsibility in Government, that the Secretary of State for Energy, who is a member of the Cabinet, has no


influence in energy decision-making and that he sits with his arms folded in Cabinet waiting to see what happens. That is stretching credulity too far. We do not believe it.
The Secretary of State for Energy must have a view. It is his responsibility to have a view. Since our last discussion, a propaganda piece against the Vale of Belvoir, written by Ronald Butt, well known to believe that he represents the conscience of the Tory Party, has appeared in The Times. He writes, as someone has remarked, to be classified and not to be understood. The article was so heavily biased that it brought a response from Joe Gormley, president of the NUM. Joe performed a demolition job.
Joe pointed out that the inspector at the public inquiry had considered "a huge weight of evidence". Mr. Butt left the impression that most of it came from the objectors. In fact, those who spoke in favour of the development included the Department of Energy, the European Energy Commission and the Central Electricity Generating Board. The two county councils involved, Nottinghamshire and Leicestershire, are also no longer opposed to the development.
Mr. Butt claimed that 4,000 properties would be put at risk due to subsidence damage. In fact, expert evidence, based on experience in other coalfields, suggests that two-thirds of all properties would not be affected at all and that only about 100 would suffer anything more than slight damage. None of the potential sites mentioned is in the Vale of Belvoir. Only one of the three proposed mines or sites is in the Vale of Belvoir. That name was given to the coalfields by the objectors for emotive and campaign reasons. The proper name should be the north-east Leicestershire coalfield.
Some new railway buildings would be necessary but the only development within the vale would be a reinstatement of mostly undeveloped track of a disused line. There would be no permanent loss of agricultural land as a result of waste disposal from the mines as only 3 per cent. of the total land area of the coalfield would be occupied by the mine site.
The CEGB has declared that it needs the coal for its local power stations. It said in evidence that it needed it to replace the capacity that will inevitably be lost through the exhaustion of reserves at pits in Leicestershire and Nottinghamshire. Joe Gormley said all this and more in answer to the propaganda effort of The Times columnist.
The Opposition said in the debate on the Vale of Belvoir—or the north-east Leicestershire coalfield, call it what one may—that it had now reached the proportions of a national scandal and that a decision to go ahead should not be long delayed. We repeat that again. The Government should make the announcement for the go-ahead for the mines, not just in the interests of the miners but in the interests of the future economic recovery of Britain.
I shall give a further example of the paralysis that has infected the Department of Energy by referring to the oil-from-coal research project. On Second Reading and in the Committee the Minister defended the chief scientist of his Department—I do not complain about that—when I pointed out that he had some responsibility for delaying the project. I have copies of correspondence from the NUM to prove it. One of the projects has been blocked. I referred to this in detail in my Second Reading speech and I shall again this afternoon. The Government stand

accused of playing their part in the abandonment of part of British technology in the development of oil-from-coal because of their failure to give funding.
Things are worse than that—this is a broken promise by the Government. They knew that a Labour Government had earmarked £20 million towards the oil-from-coal project. I know because, as the then Minister, I made the agreement. Indeed, I am the signatory to the agreement. It is in Hansard and on our parliamentary records that the Government promised that they would be no less generous than the previous Government. The promise has been broken. Only £5 million has been earmarked for the oil-from-coal project and it is tied up and wrapped up with conditions.
The Opposition can tell the Government that, whatever they may be known as in the future, they will not be known for their expedition as decision makers. Nearly three years in office, and there has been no start made to the pilot scheme and a broken promise in the funding. We want no more excuses. I regret to say, as it gives me no pleasure to do so, that it is beginning to look certain that a future Government will have to try to make up for the wasted years in the development of a British technology for making oil from coal.
In Committee I had some exchanges with the Minister that were, on the whole, friendly. I made reference to something that is especially important because of the Minister's introductory speech. He talked about the guidelines, financial accountability and costs for the production of energy. I referred to the Committee for the Study of the Economics of Nuclear Electricity, which had brought out a report called "Nuclear Energy: the Real Costs", "A Special Report". We raised this not because we wanted a debate on nuclear power but because the implication of the report could have an impact on the coal strategy that the Government envisage as being involved in the moneys we are asked to approve in the Bill today. The implications of the headline in The Guardian of 3 February "Nuclear Power Dearer than Coal", which was a prelude to a commentary on the report, have enormous ramifications for the coal industry. The CEGB said about power stations in its development review of 1978:
After Drax B the programme will be exclusively nuclear.
My hon. Friends have, over the years, never flinched in arguing that coal should be one of the major fuels in any energy strategy but our horizons have been wider than that. We have always argued for a broad-based coherent energy strategy that involved all the fuels that are indigenous and at our disposal. If it can be proved—never mind for the moment the other factors that are under challenge in the nuclear power dispute—that nuclear power is more expensive than coal energy, at the very least it calls for a reallocation of resources to energy provision in the country. I say that not only because of the Coal Industry Bill but because Parliament is entitled to hear from the Government as soon as possible their views on the report to which I have been referring.
I have set opt, I believe objectively, some of the issues that spring from the Bill that are of enormous importance and must be considered before Parliament comes to the decision to send the Bill to another place. The industry's top management structure is about to undergo a serious transitional change. The chairman, Sir Derek Ezra, will be leaving shortly. Norman Siddal, the deputy chairman will


go shortly. No successor has yet been named to replace Dr. Joe Gibson who retired as member for science, I was sorry to learn.
The successors, whoever they may be, are entitled to know the views of the House on the coal industry. I hope that the rumours that are circulating about chartered accountants and merchant bankers being interviewed as likely successors are untrue. I hope that that is idle gossip for, such proposals, as well as being extremely foolish, would be disastrous for the industry and would sow the seeds of distrust and disunity among the people who work in our great industry.
We do not intend to oppose Third Reading. The Bill is tied to the money resolution, and that makes it virtually unamendable. We could have reduced, but not increased, the money that is to be made available. We have no intention of doing that, because the industry needs the money now.

5 pm

Mr. Dennis Skinner: I agree with my hon. Friend the Member for Midlothian (Mr. Eadie) that it was necessary to table our holding motion to ensure that we had a debate. Those of us who are closely connected with the mining industry now have the chance to air our views. On Second Reading and in Committee many hon. Members were anxious to speak, but were not given the opportunity.
Until I heard it from my hon. Friend, I did not realise the full dimension of the interest payments. I have been going round the country talking about interest payments of £300 million each year, but it appears that the massive increase in interest rates, particularly in the past two and a half years, has caused repayments to reach the alarming figure of £360 million—£3 on every tonne of coal. That is incredible.
With interest rates still hovering around 14 or 15 per cent.—they have rarely been lower than that during the whole of the Prime Minister's period in office—it means that interest payments will consume all that the Minister is supposed to be "giving" to the coal industry. We know that the Government are not "giving" the coal industry anything. They are just hanging more debts round its neck. If the coal industry were treated in the same way as some of the private entrepreneurs who were engaged in the Stock Exchange activity of the past few days, perhaps it would not have so many debts round its neck. Instead, it could wear a mantle which would enable it to act more productively.
When the miners ask for a few more pounds in their pay packets, we must remember that they start with that handicap of £3 per tonne. When Arthur Scargill takes office in April—

Mr. Harold Walker: He is a grand lad.

Mr. Skinner: He is a grand lad, as my right hon. Friend said. My right hon. Friend lives near Arthur Scargill, but I am sure that he did not have to say that.
I am sure that Arthur Scargill will prove to be an able president of the National Union of Mineworkers, but he will be saddled with the same problem as those who have gone before. We need a Labour Government committed to removing some of the debts from the coal industry. Otherwise, the prospect of achieving what we want to do is remote.
My hon. Friends will be able to make some useful contributions because there are very few Conservative Members present. Moreover, there is not one member of the Social Democratic Party-Liberal alliance present, and I have been in the Chamber since the debate started. Yet those hon. Members, and others associated with them, are now carving up constituencies containing coalfields and arguing about the best men to fight the seats at present held by my right hon. Friend the Member for Doncaster (Mr. Walker), or my hon. Friends the Members for Penistone (Mr. McKay), Ogmore (Mr. Powell), Midlothian (Mr. Eadie) and Ashfield (Mr. Haynes).

Mr. Ray Powell: I am not a sponsored Member, but I should have loved to serve on the Committee. Unfortunately, I was not invited. The hon. Member for Wrexham (Mr. Ellis), who has mining interests and represents a mining area, was on the Committee, but he is not here to participate in the debate.

Mr. Skinner: It is a scandal. The Social Democrats and the Liberals talk about breaking the mould of British politics. I am here most days. I take part in Question Time and in other debates. It is a scandal how often I have to draw attention to the absence of the Social Democrats and the Liberals. Today is not a special day on which they happen to be absent. It is the normal run of affairs for the Social Democrats and the Liberals. Every time that they are absent, breaking the mould somewhere, we should put the fact on record. No doubt they are breaking a bottle, or several bottles, of claret somewhere.
The former Shadow Energy Minister, the right hon. Member for Plymouth, Devonport (Dr. Owen), is supposed to have an interest in energy matters. He was given the job by my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) after Labour's election defeat in 1979. Where is he? He is with Roy Jenkins of Warrington and that crowd—no doubt planning the next ballot. Certainly it will not be a ballot about the coal industry.

The Deputy Speaker (Mr. Ernest Armstrong): I remind the hon. Gentleman that we are on Third Reading. The debate concerns only what is in the Bill.

Mr. Skinner: I realise that, but I cannot discuss what is in this Bill—or, indeed, any Bill—unless I address my remarks to hon. Members in the Chamber. It is right for me to put on the record that the Social Democrats and the Liberals are more concerned about organising ballots to stop their rank and file members taking an interest in the coal industry, positive discrimination against women, or whatever. That has to be said.
My hon. Friends can speak with authority on the coal industry. They want to know what is happening and they want to take part in debates. My hon. Friend the Member for Ogmore said that he would have liked the opportunity to serve on the Committee, because it would have given him an opportunity to say a few things about the coal industry.
The Government are not giving anything. They are hanging further debts around the necks of the miners and the National Coal Board. The Government are giving our industry no opportunity to breathe or to compete with the industries in Germany, France and Belgium, where the subsidies are £20 a tonne, £30 a tonne, £40 a tonne, and in one case more than £50 a tonne. The industries in those


countries may be smaller than ours, but those Governments realise that it is vital to conserve and make the best possible use of their energy resources. They treat their coal industries in the same way as we treat agriculture.
The Government know that it is important for us not to import too many foodstuffs. They subsidise agriculture to get the greatest possible amount of food from our own land and resources. I accept that there is an argument about how the subsidies should operate, that there have been changes in recent years. Nevertheless, the Government recognise the importance of ensuring that our balance of payments is not too heavily weighed down by imports of food. They ensure that agriculture can take more of the market than it did previously. Over the past few decades, there has been a gradual increase in the amount of food that we grow for ourselves.
The mining industry should be treated in the same way. There should be no argument, because it is the same principle. Market forces cannot get coal out of the ground. Even the coal owners of the past understood that. It is, therefore, sensible to get as much coal as we can from the pits, and to utilise that coal in such a way that we can ride the troughs and the sloughs of depression, the booms, and so on.
I am not saying that the recession has come out of the fresh air. It is Government-inspired. Notwithstanding that, it is important that the coal industry should not suffer when there is a recession. The Opposition do not want to see pits closed and miners cast aside. Miners are being asked to accept redundancy.
About 11,000 miners—my hon. Friend the Member for Midlothian said 13,000—left the industry last year because of pit closures, and redundancy deals. Most miners want to get away, but thousands or young men are waiting to get into the pits. If we are to ride through this Government-inspired recession, surely the sensible thing is to ensure that we do not lose any coal by leaving it in the ground for ever more.

Mr. Ray Powell: Employment for young people is important. My hon. Friend addressed a meeting of youngsters involved in the youth opportunities programme who came to the House to demonstrate last week. There were thousands of them here. Most of them were from mining areas. My hon. Friend addressed about 200 from Welsh mining areas. What should the Government do to help these youngsters to get jobs? Instead of declaring people redundant in the mines, surely the Government should try to provide jobs for young people in the mines.

Mr. Skinner: My argument is that we should keep the present number of miners in the pits and, indeed, increase their number during this period of recession. If we do not do that, there is a danger, especially in areas such as South Wales, of pits closing. Therefore, it is sensible to recruit the young lads who are waiting at the gates in long queues, even in prosperous Nottingham where it was always a problem to get young people to enter the mines because of alternative industry in and around that area.

Mr. Eadie: My hon. Friend's point about the number of miners that the industry has lost is important. Does he realise that more pits closed between March 1981 and March 1982 than between 1971 and March 1981?

Mr. Skinner: Yes. That has happened despite the so-called halt to the pit closure programme in February 1981.
Surely it would be better to give an opportunity to all youngsters to go into the training centres—perhaps even on extended training courses when it is not possible immediately to get them underground, where most of them want to be—than to invent, for example, new Army and YOP schemes. That would be an investment for the future.
If in a few years we have a Government committed to planned growth and industry revives to a great extent, the manpower will be available. It would be nonsensical if, in five year's time, unemployment declined to about 1 million and at the same time there was a shortage of manpower in Nottinghamshire or Leicestershire because the Government and the industry had failed to take the opportunity to get more men into the pits.
Rather than shut pits, because there are more than 40 million tonnes on the ground, this is the time to invest. We must invest in all markets. The Department of the Environment should ensure, for example, that all new houses are built with chimneys so that householders have the opportunity to use coal if they want to do so.
That is a minor matter. The same can be said of export markets. As a result of certain difficulties in Poland, the National Coal Board has managed to export more coal. That is not tremendously important, because the starting base is so low. There has been a 100 per cent. increase, but we were exporting only a few million tonnes at the beginning. We are now exporting about 7 million tonnes. During the year, we shall increase our exports to about 10 million tonnes. We should be thinking of exporting about 20 million tonnes and capturing the overseas markets by using the potential that we have at home.
While we have massive stocks on the pit tops, we should have a large amount of retreat mining. That would mean that the Coal Board would have to forgo some of its recognised production until the boundaries were reached. As we have so much coal on the pit tops, it would not matter if north Derbyshire, north Nottinghamshire or the Scottish area did not produce as much coal per week or month. Instead, they would be going out to the boundaries and using all their manpower, and perhaps a little more besides. The resultant gains in productivity would be massive. In certain areas retreat mining has been practised. Now is the time for the board to do it, but we must not assume that it can do it in a vacuum. The board would immediately say "We need the brass." Here we return to the argument that the Coal Board should not be left with debts hanging around its neck. The Government should give the board an opportunity to use its initiative.
I do not want to start a row with my hon. Friend the Member for Midlothian about nuclear power. He talked about a total energy programme, and here we differ marginally. I do not want to go to the stake on the issue. I should like to see all nuclear power phased out. Perhaps we shall reach agreement in future. It is certainly an area in which we can expand our markets. The power stations could increase the amount of coal that they take. There is not the potential for a tremendous increase, but greater inroads could be made.
The Government-inspired recession must be used to invest for the future. That will be done by planning, not by market forces. If mining were treated in the same way as agriculture, tremendous benefits would accrue to the pits and to the miners.
My hon. Friend the Member for Midlothian talked about the social cost. I should feel guilty if I resumed my place without referring to the dying pit village of Langwith


in my constituency. I have taken the opportunity to talk about it in various debates over several years. The pit closed in about 1974. At that time there were 1,000 miners' houses. I visit the village every few weeks and I see row upon row of empty houses. The demolition of certain rows has started. When I see it, I despair. The speculators have move in. The Coal Board feels that it is not obliged to look after the miners and their widows. Some of them have lived there for 50 or 60 years. They built up the village round the pit. Now there is desolation. As I said, the speculators have moved in. Numerous repairs are outstanding. The village is a mess.
I have referred to Langwith yet again to ensure that it is on record. The Coal Board shut the pit. It did not seem to care about the village. Derek Ezra and all his underlings have been told, but nothing seems to be done. They seem to have washed their hands of the affair. They consider that it is not their business. They have sold the houses. They will not allow the local authority—I pleaded with them to allow it to happen—to take over the village. That is the legacy to which my hon. Friend referred when he talked about the social cost.
There are many more examples. There is a burning issue that involves a handful of miners throughout the coalfields. I am talking about those who worked in pits that were closed before the redundancy agreement was made. Some of the miners who retired were over 55 years of age, but others were younger. Even those aged 55 or more did not get a coal allowance, because the local agreements excluded them. It would be wonderful if some of these men—there is only a handful in this position—and some of the widows could have the chance to pick up about four tonnes of coal. Some of the widows had husbands who worked in the pits for about 40 years. They cannot understand why they have been excluded. The Government should investigate ways of ensuring that these people have a few tonnes of coal per annum, just like the others. Only a small amount of money is involved. I am not making a massive appeal to the Minister. I know that he is a smoothy. He might even have been writing it all down. It is not a massive amount. Surely the Government, despite their lack of compassion, could find a few pounds to ensure that that is done.
We must look forward to continuing the argument about retirement at 55. It will not go away. The coal industry must be discussed against the background of miners in many parts of the world retiring at 55. That is one of the matters to which the Government, in their last 12 or 18 months in office, and the future Labour Government, will have to turn their mind. I remember the arguments that went on when we tried to get retirement at 62. Sir Derek Ezra and all those clever people went on television and said that the mining industry would collapse because it would not have enough miners. Now thousands of youngsters cannot get into the industry. There is no argument about getting people out at 55. That is what we must turn our minds to in future.
The Minister will recall that on Second Reading several of my hon. Friends referred to the commuted cases for widows. He knows the argument well. I have had a relatively sympathetic reply. I do not yet know how to read it. I do not know what his thinking is. However, we are still pursuing that matter. I hope that the Minister will be able to get it through. I am suggesting £1,000 per head.
I know that £600 has been suggested by some people, but, with inflation and all that, £1,000 would not do any harm at all.
The Minister referred to achieving even greater productivity. Apart from the point that I made about retreat mining, it is difficult to increase productivity. I think that some of my hon. Friends, who have been working in the pits more recently than I and who came to Parliament later than I did, will agree that there are very few ideas that can be pursued to achieve more productivity underground. Apart from the idea that I put forward on retreat mining, there are few other areas for improvement in terms of capitalisation and investment in machinery. Mining is an extractive industry. We are running further and further out, to much wider parameters than many miners thought possible in the pre-war and post-war years. Therefore, we cannot expect much more in terms of productivity. We should understand that there are limits. New areas, such as the Vale of Belvoir and Selby, are bound to be more productive, because they are starting from scratch. In many cases, they have been using the best techniques right from the beginning. However, we should not expect that from all areas.
The industry has always been based upon the strong carrying the weak. We should not assume that because one so-called weak pit has gone into the red it should be looked at in isolation. Our industry is about Nottinghamshire and Derbyshire helping Scotland, South Wales and Durham, and vice versa throughout all the coalfields. That is the principle of the National Coal Board. It has nothing to do with market forces. We would have no mining industry if we acted in that fashion. We must act together.
The Bill will, of course, be given a Third Reading. However, let us try to ensure that a future Labour Government are committed to carrying out the kind of Socialist strategy that I have put forward—a strategy which my hon. Friends will no doubt endorse.

Mr. Michael Welsh: I was not a member of the Committee on the Bill, but I accept that because I was a member of the Committee that discussed the previous Bill and all of us—especially miners—want hon. Members to take their turn and to contribute as much as possible.
Sometimes hon. Members talk about the NCB and the National Union of Mineworkers out of context. They are both involved in one of the greatest industries that Britain has ever known. Britain depends on it. We have no choice other than coal. The industry is great and is good for the nation. However, it has taken a tremendous toll of its miners. All hon. Members in the Chamber who have been miners have probably been injured. I have had operations on both knees and I have had broken arms—and I am still comparatively young. Many miners are injured.
Although there is no such provision in the Bill, I hope that there is enough money for a tremendous amount of research to be done not only on productivity, but on safety. It is vital to end the injuries. Miners do not have two complete hands with which to play dominoes in their clubs. Everyone has a finger or thumb missing. It is strange that at 45 I sat in my club having a swift half of bitter with six friends of about the same age and all of us had some sort of injuries. In this day and age plenty of lads are queuing up, rightly, to work in pits. There is a good spirit in the industry and men work with their fellows.
Conditions underground always leave much to be desired, but nowhere else could one find that espirit de corps. The lads want to work where their dads worked, and that is right. Nevertheless, a tremendous amount of money must be spent on ensuring safety and I hope that the Minister will consider that whenever the Government consider distributing money—in the form of loans or otherwise—to the NCB.
The social consequences of the industry also fall on the poor widows. Every day of the week widows come to me because they have to pay nearly 50 per cent. in tax on their widows' pensions from the NCB. When a lady told me that, I could not believe it. The first lady to come was German. A lad had married her in Germany. Of her NCB pension, 48 per cent. had been taken in tax. That woman had probably waited every day for her husband to come back. In the mining industry women never know whether their husbands will return. They do not know whether there will be a telephone call to say that their husbands are in the infirmary, or even still in the pit. There are still some men in my colliery. Sadly, we had to seal it and leave the men inside. We could not allow others to go in and try to get them out. It was accepted that they were dead and we could not risk any more lives.

Mr. Skinner: I had not intended to intervene, but my hon. Friend has raised an important point. It should be placed on record that the pension for a miner's widow or retired miner is only a little over £6. No one listening to this debate or taking down the words should imagine that they receive a massive amount. They have never paid tax on it before. An elderly person whose husband has passed away receives £29·60p in old-age pension and £6 plus a few coppers from the NCB pension. That is less than £37 in total. Those are the figures. For the first time in their history those people are being taxed by the Government. Why? As my hon. Friend knows, the Government refused to raise personal allowances by one penny piece in the last Budget. As a result those people have been brought into the tax net. That must be explained because some people might think that we are talking about big pensions.

Mr. Welsh: My hon. Friend is quite right. Those women cannot believe the level of tax that they must pay. They are good village people and take everyone at face value. They always thought that people were just, moral and God-fearing. Yet they receive letters saying that they will be taxed at 48 per cent. They cannot believe it. They do not believe that anyone would do such a thing to them.
One cannot get it through to those beautiful ladies that the Government have no compassion and attack the weak. The Government are attacking these beautiful ladies whose husbands have retired, died or been killed in the pits. It is unbelievable. Such ladies come to my surgery every week. I send their letters of complaint to the Secretary of State for Social Services or to the Chancellor so that they can read them.
We all accept that if a lad gets a leg taken off it is a terrible thing. In the past, accidents were not so severe. Although we have reduced the number of accidents, those that happen now are more serious. In the past, if a lad slipped off a conveyor belt he would probably break an ankle. Now, with steel conveyor belts, his leg will be whipped off. Present-day working methods are a completely different kettle of fish.
The price of progress has been that, whereas in the past a lad would receive industrial injury benefit immediately,

now, because of other circumstances and legislation, he will receive no industrial injury benefit. All that he wall receive is sickness benefit for the first eight weeks. The National Coal Board will now be obliged to pay out what the Government used to pay. A miner's colleagues will now go to the infirmary to see an injured lad who may have lost a leg and tell him that his sickness benefit will come through next week. He will simply not believe that. He will say that no one can be so hard on him, that he has hurt nobody in his life, that he works five good days at the pit, that he goes to church on Sunday, so he cannot see why anybody should treat him like that. That will be the result for that poor kiddie. What happens to the individual is more important than any Government legislation. We should not forget that all legislation affects the individual. That is the vital point.
As a result of the Bill, when that lad receives his benefit, the board must pay the difference. That is the result of the agreement with the Government. The board must pay more money than ever before, thus diverting money that could be used for other projects. The amount of money provided by the Bill has been increased because of those factors, but it will not be possible to get it through to the miners that they will not receive earnings-related benefit as they did before. If the miners have a shortcoming, it is that they believe that other people are as honest and sincere as they are and it is just not so.
My hon. Friend the Member for Midlothian (Mr. Eadie) spoke about new fields. It is said that in an extractive industry one closes pits. We all accept that. Indeed, that is what we must achieve. After opening a pit, miners must then try to achieve its closure by extracting every tonne of coal.
It is deplorable that, although one and a half years have elapsed since the inspector's report on the Vale of Belvoir was placed before the Secretary of State for the Environment, a decision has still not been made. As I have said before, and, as I think the Minister will agree, the Vale of Belvoir must be allowed to proceed. It must have three shafts. If we insist that the National Coal Board increases productivity and that unit costs must be reduced, there must be three shafts. I agree with that. It is good for everyone. There is nothing wrong with reducing unit costs. If permission is granted for only two shafts, unit costs will be greater. Surely the Minister will accept that.
If we are to help the National Coal Board to work efficiently, increase productivity and keep down unit costs, the Minister should examine the Vale of Belvoir from the point of view of good business. Perhaps the Minister will put pressure on his right hon. Friend to regard it in that way. I am sure that the Secretary of State for the Environment will consider it in that light. We must extract all the coal that we can from it, but to do that efficiently three shafts are essential. I hope that that point will be taken on board.
As my hon. Friend the Member for Bolsover said, the problem of investment in the industry is not what we are spending on it directly but the rate of interest involved. If it is agreed that there should be more investment and that output should be increased, perhaps the Minister will consider another matter that is near and dear to me—the Third world. Has the Minister examined the energy position in the Third world?
It may surprise people to know that some Middle Eastern countries generate power from British coal. One Middle Eastern country is totally dependent on Britain for


coal. If our coal is sold to the Middle East, it must be competitively priced to have won the contract. If we sell it there, why can we not expand our sales into the Third world—the whole of Africa, for instance—and help those countries with their energy requirements? The price of oil has crucified those poor countries.
Perhaps the Minister would consider discussing that matter with the chairman of the National Coal Board. There would be nothing wrong in his discussing the matter with the new president of the National Union of Mineworkers, a nice little laddie, moderate in his views and thoroughly acceptable. We should congratulate him on his success. I hope that he has a long and successful career as president of the NUM. I see no reason why the Minister should not discuss that matter with Arthur Scargill. It would be an opportunity to export more coal to those countries.
Investment in the coal industry is dependent on the Bill. Will there still be money to invest in places such as Bretby? It does much research for the industry. Without it and its like, the industry would not have advanced so fast as it has. Does the National Coal Board have money available to invest in Bretby? Mr. Peter Trigg-Ellis, who is director there, is an extremely capable man and has done much useful research into extracting coal on level seams, ensuring that the hidden eye keeps the seam level. If there is a level seam, one is home and dry. With a level seam, production levels can be kept high, everyone is happy, one gets a good top, the props are on a good top and the coal comes out like nobody's business. That type of research has been done at Bretby and I hope that it will continue.
I am disappointed that the future of coal is such that we shall no longer regard a mine as being full of coal but as a sea of oil. There is no doubt that coal will be the source of oil in the future. That is a pity. My hon. Friend the Member for Midlothian also expressed disappointment about that. All Opposition Members are disappointed about it. I hope that the Minister will say something about that. Will he examine the matter further to see whether at some future date more money could be invested in this?
I hope that we never have to extract oil from coal under licence from another country just because it has done the research before us. I hope that the Minister will speak favourably now and say that if the money is not already available he will keep a keen eye on the situation and more Government money will be made available for this great innovation if progress is made. It is one of the greatest new developments in the world. We have the coal, and there is no reason why we should not be the front runners in extracting oil from coal.

Mr. Ray Powell: I have a great interest in the Bill as I am a miner's son, born and bred in the Rhondda valley, and I now represent Ogmore which contains a number of collieries—St. Johns in Maesteg in the Llynfi valley, Garw colliery in the Garw valley and Wyndham-Western colliery in the Ogmore valley. In November last year, the NCB decided to close the Coegnant colliery in the Llynfi valley, which had produced fine coking coal for this country for more than 100 years. As a result, between 200 and 300 miners were made redundant.
In my constituency, there are 3,000 miners and many other people are employed in subsidiary industries serving and supplying the collieries, so I have a direct interest. Moreover, when I realised that no real Welsh Member, democratically elected to represent his party, had sat on the Standing Committee, I thought it essential to contribute to the debate today and to draw the attention of the House, the Government and the NCB to the absolute necessity for investment in the Welsh coalfield. My hon. Friend the Member for Midlothian (Mr. Eadie) mentioned the Vale of Belvoir and other developments. I shall concentrate on the development of the coalmining industry in South Wales.
The Welsh coalfield needs a new deep mine at Margam. What is the current position? Has the Minister had any recent discussions with Sir Derek Ezra about the Margam project? I have raised the matter many times since 1980, and on 14 December 1981 I initiated a full debate on employment prospects in Wales, calling on the Government to increase investment in the NCB for developments, including the new deep mine at Margam, to ensure that the South Wales coalfield shares in the expansion and modernisation of this traditional industry which is so essential to Wales and to the nation.
Last week, we had a debate on Welsh affairs, which was opened by the Secretary of State for Wales. I was absolutely disgusted that after 54 minutes, in which he spoke of unemployment, water, roads, housing, hospitals and many other matters, the right hon. Gentleman had said not one word about the Welsh coalfield. Why are the Government ignoring the Welsh coalfield when its productivity record, as announced yesterday, is outstanding?
Despite the geological difficulties which make so many mines in South Wales dangerous and hard to work, the miners are playing their part. For the second year running, pit production has risen. It rose by 4·5 per cent. between 1979 and 1981 and by 3·6 per cent. last year. Yesterday's South Wales Echo, today's Western Mail and the South Wales Argus are full of praise for the miners and their productivity record in South Wales. Philip Weekes, managing director of the South Wales coalfield, has given full praise to the South Wales miners for their magnificent achievement, but more investment and modernisation are required to make the older, difficult mines as profitable as they should be. The miners are entitled to ask that the money be made available by the Government through the NCB and that long-life pits should be started now so that future long-term employment is guaranteed.
The closure of the Coegnant colliery prompts me to refer to the difficulties in my constituency. Most of those miners will be absorbed by the nearby colliery of St. Johns, but the closure means a loss of jobs and job opportunities in an area which has already suffered at the Government's hands. Unemployment in the Maesteg area is more than two and a half times greater than it was when the Government came to power. It is now about 20 per cent. and rising. The men believe that they have not been given a fair chance, that there are valuable reserves of coking coal and that investment to open new seams would have enabled the pit to continue extracting coal for which there is demand. The NCB estimated that an investment of £4 million would be needed, but decided against it on the grounds that there were geological difficulties and there was no certainty that any new seams would be


workable and profitable. Apart from strike action, the men had no alternative but to accept the decision, which they did on 7 November 1981.
The lack of investment is putting other collieries in South Wales at risk. Although pits are producing large amounts of coal at the coal face, lack of mechanisation reduces overall output figures. For example, output at the coal face in the Trelewis drift is 17·5 tonnes per man-shift, but overall production is only two tonnes per man-shift. At the Marine colliery, production is 12·5 tonnes at the coal face, but only 2·5 tonnes overall. The production and productivity of many collieries, some in danger of closure, can be improved if the NCB will invest in developing new seams, including mechanisation at the coal face, and in bringing coal to the surface.
The NCB manpower in the South Wales coalfield is 25,000—950 fewer than a year ago. In one year, there have been 473 early retirements and 300 men have left voluntarily. A total of 600 men, about half of whom were juveniles, have been recruited. The NUM complained that men taking early retirement were not being replaced. There is a shortage of men at the coal face. The development of new coal faces is being held up and men are often taken from the coal face to help in opening new faces. That means a substantial loss in output. As a result, pits will become uneconomic and will soon face the threat of closure. Serious trouble may arise unless more men are recruited to meet those needs.
Government investment in the South Wales coalfield was £35·6 million in 1979–80, £35 million in 1980–81 and £30 million in 1981–82. The Government are spending £5 million less this year than last and £5·6 million less than in 1979–80, a drop of approximately one fifth in the total investment in South Wales in the past three years.
The Secretary of State for Wales (Mr. Edwards) said:
The Government are committed to…Plan for Coal and are making available…£800 million for the industry in the current year ."—[0fficial Report, 2 February 1981; Vol. 998, c. 9.]
Investment in the South Wales coalfield is substantially less in real terms than it was from 1977 to 1980. At the end of November 1980, coal stocks in Wales were substantially reduced to 2·9 million tonnes of deep-mined coal, mainly steam-raising coal, which is 1 million tonnes less than a year ago. In the 13 weeks up to the end of November 1981, 900,000 tonnes were taken from stock. The reasons for that were the good performances at the Aberthaw power station, the success of the export drive and higher sales to steel works. The NCB expects to clear stocks by mid-1983. The output of South Wales pits increased by 6·4 per cent. in the past 12 months and if British Steel wanted to buy more South Wales coking coal for the Port Talbot and Llanwern works next year then the NCB will not be able to supply it because of its export commitments.
We are glad to hear of the extent of the NCB development and its success over the past year. The British coalfields produce the cheapest and best mined coal in Europe. The cost of coal in nationalised pits is £35 a tonne; in the private pits of West Germany it is £45 a tonne, in France £45 and in Belgian £61. The NCB finds it difficult to compete with European countries because of the high subsidies given to their coal industries. For example, the subsidy paid to the Belgium coal industry is £27 a tonne, to the French £15 and to the West German £12, and the French Government are increasing their subsidy substantially.
The NCB is heavily shackled by high interest charges on borrowed capital. As far as the current total is concerned, my hon. Friend the Member for Bolsover (Mr. Skinner) and my hon. Friend the Member for Midlothian have amended the figure I had to some £360 million. Exports could be increased if the Government increased the NCB subsidy and took over the burden of the high interest charges with which are inflicted on it by the Government's policies.
I should like to repeat a suggestion that I made in the House last year, and give the background to the development of the proposed mine at Margam. About seven years ago the NCB considered investing in this new mine. At the time the estimated cost was some £80 million and it was expected that the project would employ about 150 men immediately, but nothing was done about it. Since then, pressure for the project has built up, mainly because it would release huge reserves of first-grade coking coal for which there will be a demand in the very near future.
The current scheme envisages an investment of almost £200 million. It would take nearly 10 years to reach full production and would employ a thousand men. It would produce enough coal for the needs of the BSC and for export. It would be virtually on top of the huge Port Talbot steelworks and near the Llanwern works, thus reducing transport costs to a minimum. There would be excellent access to ports and railways.
When the new mine was first agreed, it was hoped it would be ready to absorb the men in the Maesteg area when the reserves at collieries there became exhausted. Since then the Caerau and the Coegnant collieries have closed and the Garw and the Wyndham-Western collieries have reserves for about 12 years. If the Margam project is begun soon, the men from those collieries could be employed in the new pit.
What will happen to them and to others if Margam is not opened? There will be fewer jobs, even less coal being produced and more miners on the dole and perhaps lost to the mining industry forever. The work force at the Wyndham-Western colliery in Nant-y-Moel holds the top position in the NCB's improved safety standards league and that is attributable to the skills of that work force. They work under very difficult conditions, needing expertise, knowledge and skill; they should not be constantly under this threat of closure.
The chairman of the NCB, Sir Derek Ezra, says that Margam is still a live project, but, because of the considerable depth, it appears that the costings are above the norm. Why are he and the Government not prepared to have this project classified as different, so that it has an independent investment in addition to the overall plan for coal?
Work should be started immediately to show the Welsh miners that the NCB has a duty to the Welsh coalfield. The only way it can survive is by such a commitment. Margam, with its reserves of 20 million tonnes of coal, would be the injection of confidence that the Welsh miners need. The young need to know that they have a future in the industry and the NUM needs to know that promises are kept. If South Wales is not to be dismissed as a declining and decaying coalfield, the fight back for the mining industry and for the Welsh people must start now.
The people of South Wales have been dominated by coal. Their whole environment has been destroyed by it. Now that things have changed they have earned the right


to new hopes of a bright future or of at least some future. Margam should be the start. I ask the Minister and the Government to discuss the issue with the NCB and the NUM as a matter of urgency so that that progress can be made at the earliest possible moment. It is a matter of national importance in which the Government must give a lead to preserve jobs and create jobs and to safeguard Britain's energy resources.
Since 14 December the European Commission has discussed the Margam project. Plans have been made so that money from the EEC can be invested in a project of this type if it were developed and if the Government would put pressure on the NCB, and perhaps give it more funds, to ensure its development.
I make no excuse for raising the matter yet again because it is important for the Ogmore constituency. It is also important to the constituencies of my right hon. and learned Friend the Member for Aberavon (Mr. Morris) and my hon. Friend the Member for Neath (Mr. Coleman). In that catchment area of three constituencies 26,000 people are unemployed. Unemployment in Maesteg is about 20 per cent. With a development of this sort it would undoubtedly be possible to ensure future employment in the area.
Earlier my hon. Friend the Member for Bolsover mentioned future development, and jobs for young people. Today 100 children from the Pencoed junior school visited the House. My hon. Friends the Members for Bolsover, Keighley (Mr. Cryer) and Bishop Auckland (Mr. Foster) addressed them. At the end of the discussion the headmaster, Mr. Tatchell, expressed concern about the future not just of young people of 16 or 18 but of those who have come here today, aged 10. We are a mining area, and we look to the NCB for development and for future jobs within Wales.
In last week's debate on Welsh affairs the Secretary of State for Wales mentioned everything but the Welsh coalfield. The House can be proud of Welsh miners who have represented constituencies. I think of Nye Bevan and others, who ensured that the future of the coal industry was secure. Unfortunately, over a period of years we have lost people who advocated future employment for the Welsh miners. However, I hope that the Government will heed my request for the development in Margam.
Several of my hon. Friends have already mentioned the widow's pension. I have received a letter from a Mrs Williams, of Pontycymmer, Bridgend, the widow of a miner. She says:
My husband worked for 40 years in the colliery and I regret to say that he died in February 1976. I receive £29·60 widow's pension a week plus £6·62 NUM pension, which makes a total of £36·22 per week. I had a letter from the tax people stating that after 6.4.82 they will be taxing me on my NUM pension. Surely this is not right. I can honestly tell you I have great difficulty in making ends meet.
We can well understand that.
I don't get any allowance for my gas until I reach the age of 60 years. Then this will be debated between the NUM and the Coal Board. I have tried on numerous occasions to find work, but my age is against me. Also, I am under doctor's orders not to do any heavy work as I am suffering from a bad heart.
Such letters are depressing. They come from people who are thoroughly depressed. I should like the Government to take action to help the widows of miners and pensioners in return for the stalwart work that the miners have done for the nation.

Mr. Allen McKay: As the Minister said, the coal industry is a vibrant industry and is poised for a great future, but that future is marred by the Government's policies. The Government talk about the future of industry, not only coal mining, but they are cutting home demand through their policies. Their monetary policies affect the mining industry, because it does not have the home market that it used to have. That brings not only financial but physical problems, because it costs a great deal to stock coal. We are worried, because before long there will be nowhere to stock it.
Hon. Members have talked about productivity. My hon. Friend the Member for Bolsover (Mr. Skinner) put his finger on the matter. I worked in the industry during a great period when we were weak in the use of electricity and lacking in knowledge. At that time the era of private ownership had only just ended. The old coal owners had had a great deal of say in what happened to the men in the pits. One went to school for a while, until one happened to have a shift off, and then school stopped, so most of our knowledge was gained in the old apprenticeship way, being passed down through the skills of those who went before. I worked in the era when to repair an electrical breakdown one first hit the switch with a prop, and only if that did not work did one open one's toolbag.
I left to enter the industrial relations side of the industry as we were approaching the stage of electronics. The increase in output during that period was tremendous, but as one breaks through to mechanisation a certain plateau is reached and then progress is steady and sometimes nil. We are on that plateau now. A further increase in productivity through mechanisation and modernisation will be difficult, though not impossible to achieve. The industry meeds revitalisation of the economy in order to build the home market again.
The export side is now beginning to grow and has distinct possibilities. It can take the surplus output. There is no doubt that we shall have surplus capacity. That is why I was interested when my hon. Friend the Member for Don Valley (Mr. Welsh) asked the Minister whether the industry had considered the Third world. In debates on nuclear energy hon. Members have not only talked about nuclear power stations for the United Kingdom but have made the excuse for continuing with that development that there is a need for such energy in the Third world. When we have the capacity to produce and export the coal, it would be silly to build nuclear power stations in the Third world. Exporting would have a knock-on effect throughout industry. If we export, we must have ships to carry the coal. That means building the ships, and for that we need the steel.
My union, the British Association of Colliery Management, is very much aware of the investment in the industry. It welcomes it and wants to see the Bill on the statute book, but it is also aware that there is a need for continuing investment, because Government policies are affecting the amount of money that the Coal Board has, and the amount that it must borrow, because of high interest rates.
There is a reverse effect. When the industry starts to economise, it must do so in terms not of men but of machinery. I have seen collieries that have nearly been closed simply because of the management's attempts to economise. It tends to cut back on the type of mining


machinery that is required, such as conveying machinery. One finds that gradually the conveyor belts are reduced from a width of 48 in to 12 in. Management tries to pare them away as it continues to use them, but then coal goes on to the floor and extra money is needed to clear it away. It is a vicious circle. Gradually one finds oneself getting into the terrible position of having to invest at a higher cost in machinery in which one should have invested a long time ago.
It is important that a decision should be made about the Vale of Belvoir, which is not excess or increased capacity, but replacement capacity. The replacement time for the Vale of Belvoir is now close. With a 10-year development life for the new field, the collieries in the Leicester coalfield could close before the replacement capacity is available. If that happens, not only does one lose productivity in the new coalfield, but one loses the men needed to work it.
I remember that when I worked at Hobart House there was an economist called Shoemaker. During the 1960s he decided that collieries could be put in three categories, A, B and C. Category A was the most profitable, B was on the borderline and C collieries had to be closed because they were uneconomic. I said that the policy was mistaken, because while one can beckon a man to come, he can shake his head and say that he is not coming.
That is what happened. The board closed the C category collieries and expected the men to move to B category collieries and create profitability in that area, but the men did not move. They closed the C collieries and lost that capacity, the B collieries decreased their capacity and ran into the C category. That is why we had the closures of the 1960s. I should not like to return to that.
With the exception of about four collieries, the collieries in the Barnsley area in which I worked were closed. On paper, they were the oldest in the Yorkshire coalfield, the most difficult to work and the most unproductive. A sum of £127 million has been invested in that coalfield. That investment was needed and must continue. One of the newest collieries, Kinsley, which is only three years old, is now becoming profitable.
Investment in the Barnsley area has not been on the machinery or coal face, but on underground development and four new washery plants. All the collieries in the Barnsley area have been linked together underground by one of the largest machines in the world, and four new plants are now being built. It means that we will have a quantity and quality of coal never before supplied by the Barnsley area coalfields. It also means that output and productivity per man will be increased by possibly half a ton to a ton OMS. That will make it one of the most profitable areas in the National Coal Board's crown, although not long ago it was scheduled to run down.
There is a price to be paid, because when one has a development like this there is a problem with four points of egress replacing 14. That means that all the dirt will be put into four places rather than 14. Some people say that it is better to have it in one place rather than to spread it around. There is some merit in that.
The National Coal Board and the House have to look carefully at the Flowers Commission report on the environment, which pointed out future problems. Investment will be needed by the Coal Board and the Government to get rid of eyesores, not only those caused by past coal owners but those caused by the National Coal Board. We tend to forget that the National Coal Board

inherited a great problem from the coal owners which the nation has to remedy. We have to look closely at the cost to the environment and the cost of moving the tipping areas.
That brings me to the development of the eastern side of the coalfield, because there is a possibility of a new area and a new era in mining by driving to the East Coast and sinking a shaft at Drax. The coal could be parcelled into nice, neat little blocks, which could be developed and worked as and when the economy required.
The coal could be brought out at Drax without any transport or environment problems and used for the power station. The dirt could be taken back to the East coast and a reclamation scheme started in that area. I believe that it is well worth looking at. It probably sounds too simple, and I feel that there must be some terrible snags.
The South Yorkshire county council has done a great job for the environment with some of the old tips. However, because of Government policy, the money provided for local government is being cut and they will not be able to spend money on fringe areas to create a new environment. There is a need for Government investment in the environment.
There is also the matter of subsidence, and I believe that we have to look at the working of the Coal Mining (Subsidence) Act 1957. I have always been a little wary of interfering with this, because a lot is left to area director's discretion, and there is always the fear that if one interferes with discretion one may kill the goose to try to get hold of the egg.
I have done very well with my area director over the problem of subsidence. Unfortunately, the old planners did not show a coal seam under the village of Elsecar. The coal seam was worked out many hundreds of years ago, with the result that it collapsed and let virtually the whole village in. The local authority lost about 140 prefabricated houses, which would have been pulled down in any case about eight of nine years later, but that period of life was lost. About another 40 or 50 local authority houses were demolished, so the cost has been tremendous, because, although the National Coal Board is generous with its compensation, it only pays the market value of the house.
There is also the problem of having to deal with the people concerned. They suffered the effects of subsidence for about eight or nine years while the National Coal Board continued to work the seams. They lived in houses, which had been temporarily repaired, and as Elsecar deteriorated they were affected physically and mentally. That is nearly over and settlement is taking place, but the scars still remain both in the district and on the people. If anybody wants to learn about subsidence he should talk to the people of Elsecar and he will get first-hand information
I have taken this matter up with the National Coal Board. I realise that there are problems in compensating for mental fatigue and destruction of the environment, but I do not think that it is beyond the realms of possibility for the Coal Board to pay compensation for stress and strain. There should also be Government aid, because the Coal Board will not be able to afford it all.
Compensation is paid for the terrible disease of pneumoconiosis. It is time that we looked at the effects of working in the coal industry on bronchitis arid emphysema. They are all closely related. I realise a large amount of money would have to be paid in compensation, but there is a time when we must look at the situation.
Many miners suffering from those diseases are convinced, as I am, that they result from working in that environment, and therefore should be classed as industrial disease.
The other reason for investment in the coal industry is the wealth that it creates for private industry. It creates wealth for firms that make mining machinery, hydraulic supports, conveyor structure and haulage equipment. The National Coal Board is also one of the greatest contributors to the rates of local authorities. That has another sting in its tail. The Government have cut grants to local authorities and the rates have increased. The cost to the National Coal Board in the rates that it must pay has also increased.
The National Coal Board is the greatest user of steel. Therefore, a rundown in the coal industry would affect the steel industry, and also the use of electricity. We should look at the way in which we distribute electricity. I was talking to Mr. Ian MacGregor, the chairman of British Steel, recently. We are now entering an era when we can build coal-fired power stations within the curtilage of some British Steel works. The combined heat and power method could be used in the new power stations. We could use the surplus heat and energy from the power stations, and also from the steelworks, to supply the surrounding villages with heat and energy. That would save a great deal of money.
On Second Reading hon. Members talked about privatisation of the coal industry. I did not say anything at the time, because it seemed ridiculous. However, the pace gained momentum, so something should be said. There is no going back to privatisation. The men who work in the coal industry would not accept it. It could not be afforded, because a vast amount of investment in the mines is needed to create a profit. A single unit would not be able to afford such investment without the backing of the rest of the National Coal Board and its units. The mining industry probably would not have been nationalised if private enterprise had been successful. It was because private enterprise, in the main, was not successful, and because there were poor conditions of work that the miners decided that the industry should be nationalised.
Privatisation is impractical, because the mines need specialist services. The services of geological, planning and project engineers, electrical and mechanical engineers, surveyors and marketing people can be provided by a nationalised industry, but a single colliery could not provide them. That is why small private mines sell their products to the NCB so that it can market them.
There is also a problem of safety and health. While I and others were working for the National Coal Board as electrical engineers, we were seconded on a cheek-by-jowl basis to work on private mines. It was usually after the mines inspector had called on such mines that were asked to put right what had gone wrong. We needed a four-yard rail to cross over the signal wires, so we had to do a good rejuvenation job in the private mines. Therefore, to talk about privatisation is not practical, either financially or physically.
I stress to the Minister what has been stressed to him time and again in the debate—the plight of the widows. Like my colleagues, I receive letters and representations from people from whom one should not have to receive them. The Minister should talk to the Chancellor of the

Exchequer, who could put the matter right on Tuesday, if he so wishes, by lifting the lower tax threshold. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) told the House after the last Budget debate that a widow on State benefit plus 50p was brought within the tax range. That is why miners' widows have been taxed at the high rate of 44 to 48 per cent. The Revenue has decided that the tax will be taken from one source. There is a tax not only on widows' State benefit, but on their pension benefits, which brings them up to the rate of 48 per cent.
This industry is poised for greatness. It can succeed. The only thing that it needs is help and encouragement from the Government and the reversal of their policies. If we can get that, the mining industry can provide all that this or any other country asks of it.

Mr. Frank Haynes: As you have listened to the debate on the coal industry, Mr. Deputy Speaker, no doubt you have realised that there is a whole wealth of experience among hon. Members who have contributed so far. You will fully understand what is being said because you represent a mining area.
The Minister has also associated himself with the mining industry so that he can get to know what the job is all about. There is no doubt that due to the experience that the Minister has gained, although he represents a constituency called Croydon, which is miles from any pit, he has understood many of the things that have been said.
Like my hon. Friend the Member for Bolsover (Mr. Skinner), I remember many years ago when we first worked in pits. Like me, my hon. Friend worked there right up to the last moment before he came to the House of Commons. At that time the work force was 1,250,000. That work force is now less than 250,000, which shows the progress being made by the mining industry.
All Governments have tried to do what they could, bearing in mind the economic situation, about the finance for the development of the mining industry in the interests not only of the people who work in it, but of the energy requirements of the nation. The Minister realises that we are looking forward to a revival of the economy of our nation. We will be more dependent than in the past on the coal mining industry, for the future of people not only in their own homes but in industry, which will be able to obtain a cheap commodity from the mining industry.
During the recession we have many steps to take. My hon. Friend the Member for Bolsover referred to retreat mining, which can slow down the process of production during this period of recession, while at the same time developments are made in preparation for the revival. We will need every cobble of coal that we can produce in the future, never mind the 40 million tonnes of coal in stock on the surface at the moment, which will be swept up when the revival comes. We must remember that half of industry has closed down, so it is not using the fuel that we are producing. Therefore, we have a first-class opportunity to do something about development for future years.
Many years ago, the colliery manager of a pit I worked in approached the under-manager at the bottom of the pit and said "William, when I left home this morning to take my dog for a walk, I reached the foot of the second pit tip, sat in the glorious sunshine and watched the headstocks. I looked at the wheels turning and there was a 20 minute period when they never turned. I want to know why." He


was told that they were waiting for coal to arrive from the districts and that they would then get it up the shaft; while waiting for coal, the wheels stood still. The manager then said "William, it is your job to make sure that we have coal at the pit bottom to wind it up the shaft and, when I take my dog for a walk again, I do not want to see those wheels stood still."
When the manager next walked his dog in that pit area, the wheels never stood still because the under-manager had given instructions, if his men were waiting for coal, that it made no difference; they had to keep winding the chairs up and down the shaft because the manager would not know the difference. We have moved away from those days. We now produce so much coal that we cannot get it up the shafts.
We have a responsibility for the future development of coal because of shaft capacities, and the pits with coal faces containing millions of pounds worth of equipment that can only turn two shifts in 24 hours. That represents a waste of valuable resources. It costs over £1 million to man a coal face with equipment, even without considering manpower. That equipment stands idle for eight hours and we need to do something on shaft capacities. Skip-winding exists at many modern pits and, if we increase the size of skips, we will overcome the problem of getting coal up the shafts. However, shafts in the older pits will, in the not so distant future, dig into the lower and higher seams in order to increase production even further.
To increase its shaft capacity, a pit in my constituency—it was tub-winding and not skipwinding—put a 3 in. piece of steel around the tops of each tub to increase the capacity of the shafts. We must go much further than that. These coal faces must be worked on a 24 hour turnover each day to produce the coal we need in future.
I shall mention the Belvoir coalfield because I referred to it in Committee. The Minister, Secretaries of State for Energy and the Environment have not been forthcoming on Belvoir. Nobody in Government is prepared to make any announcement, bearing in mind that everything now seems to be in favour of working that coalfield. Belvoir is essential in one aspect for my constituency because my area contains many pits which, although not near closing, have only about 8 to 10 year lives. Belvoir will take 10 years to develop and that must happen in order to soak up the manpower to be laid off from the other pits. That is the nationwide situation on coal-mining and we must be prepared to deal with it in the proper way.
We waste valuable resources in the mining industry because of the Government's new word—"privatisation". The industry contains people with expert knowledge who can do many things for the interests of the economy and, in the main, for the mining industry. We should be allowed to produce some of the machinery presently manufactured elsewhere. I hope that the Minister will consider that point. People have been trained for such jobs but they are not being used. Men with university degrees are no longer brought into the industry to run pits. Considering the structure of management nowadays, it is apparent that they come from the coal face and, therefore, they know what pits are all about.
I agree with the reference by my hon. Friend the Member for Midlothian (Mr. Eadie) to Sir Derek Ezra, whose term as chairman of the NCB finishes in the near future. The Secretary of State for Energy and the Minister are ducking the appointment of the NCB's new chairman.
There is a feeling of unease, not just in management, but throughout the industry, because workers cannot learn who the new chairman will be. I hope that the mistake is not made of paying a £2 million transfer fee for somebody from America. The men will not accept that; they want somebody from inside the industry who knows what it is all about.
My hon. Friends the Members for Midlothian and for Bolsover (Mr. Skinner) also mentioned interest rates. I repeat that the mining industry has made a profit every year since the first day of nationalisation. However, it has been crippled by interest rates, which are half its problem; it has held back for that reason. I hope that the Government, when considering interest rates, will take such aspects on board in future. It is a public industry and, like any other public or private industry, it must borrow money. The present massive interest rates do not help.
I am not going on any further because I have said my piece. I am satisfied that the contributions made today were noted and I know that the Minister is prepared to listen. However, I simply hope that he is prepared to act.
I realise the difficult job that the Minister has when dealing with the Secretary of Starte for Energy. I have been here for nearly three years and know that we will not make much progress on public industries with the Secretary of State for Energy. He will make industry work for the private side—Amersham International was mentioned not many hours ago. I simply ask for a fair chance for the lads in the industry; that is all we want from the chairman and the rest of the board. We must give the workers the opportunity to prove to the nation, as they have proved over the years, that they can produce the future energy requirements that this nation needs.

Mr. Eric Ogden: Mr. Deputy Speaker, you have allowed what is usually called a wide-ranging debate on Third Reading. That is correct in view of the expertise that hon. Members have been able to bring to the discussion. There has also been the opportunity co hear from the hon. Member for Ashfield (Mr. Haynes) how William was persuaded to keep the wheels moving. I recall similar stories. I entered the House in 1964 when the hours were much longer than those about which hon. Members now complain. The hon. Member for Ince (Mr. McGuire) told me "Never mind, comrade"—we were comrades then and I hope that we are still friends—"the hours might be long, but the roof is better than the one under which we worked a few months ago."
It will be agreed, I believe, that if the coal industry is to have any chance of maximising its potential in planning, production, consumption or development, there is a need for a much longer-term approach than has been provided for the industry over the last 17 years. Planning and development should include factors in addition to those included in the tripartite agreement and the present arrangements that exist between the industry and the Government and between the Government and consumers.
I have been trying to decide, while listening to the debate, how many Coal Industry Bills have come before the House since 1964. There must have been eight—possibly nine. They seem to arrive at irregular intervals, although the average is one every two years. That seems much too short a time for anyone concerned


with financial planning and the operations of the National Coal Board, or any other industry, to be able to work. There is too great a degree of uncertainty.
Clause 1 increases the limit on the aggregate amount of borrowing by the National Coal Board, this time to £4,500 million, which may be increased by order to £5,000 million. Given the uncertainties of inflation and planning factors, I wonder how long will elapse before a new Bill has to be introduced. A better Bill would perhaps have removed any limits on the borrowing powers of the board provided that the board is responsible for its own borrowing and finances. I am not advocating privatisation on the Amersham pattern—indeed, the reverse. The board should be free to make and be responsible for its own financial arrangements. It should be able to make its own deals about money borrowed from Government sources. There should be no more of this biennial limiting of the amounts that the board can borrow.
If the Government cannot agree to what I advocate, I at least urge planning on a longer-term basis. Under the tripartite agreement between the National Union of Mineworkers, the National Coal Board and the Government, there has never really been the opportunity to look further forward than 12 or 18 months, or perhaps two years. It has rarely been possible to plan production and consumption markets involving the National Coal Board and its biggest customer, the Central Electricity Generating Board, more than 12 months or possibly two years ahead. That is too short a time.
The agreement on production between the NUM and the NCB inside the tripartite agreement has rarely looked more than a year ahead. There should be a new kind of tripartite agreement over a longer term involving the union, the Government and the management of the industry. To ensure security, the method of negotiating rewards inside the industry should be examined in the longer term. Security of supply also has to be planned on a longer term basis. It has been possible to negotiate Commonwealth sugar agreements and wheat agreements between diverse parts of the Commonwealth and consumers here over three years. Therefore, it should be possible to negotiate longer term agreements over the planning, distribution and production of coal.
There has been reference to the European dimension and the possibility of exports to Mediterranean and North African countries. The debate has concentrated on the physical exporting of coal. I feel that the National Coal Board could achieve greater earnings through the export of knowledge and expertise—for example, in the Chinese coalfields. Technique and technology are important. The hon. Member for Penistone (Mr. McKay), who has been a mine manager, spoke about techniques in level seams. The hon. Gentleman may have worked on the east side of the Pennines in the same seam where I was employed on the west side. Our seam was called the Bradford four-foot seam, Manchester. It may have had a different name in Barnsley. I do not believe that it was a flat seam in Barnsley. The Bradford-Manchester seam was a one in four. We were working on the side of a hill simply because of the geological strata in which the seam was enclosed.
If we were to develop our expertise in order to show people how to make the best use of their indigenous resources, we would be able to equal and possibly exceed our present earnings from the export of coal. To

concentrate on coal exports means that we neglect to a degree, but not entirely, the benefits that could come to this country if more attention were paid to the skills and knowledge that other countries need.

Mr. Allen McKay: Is the hon. Gentleman aware that the National Coal Board at present has teams in India developing two coalfields which should prove beneficial not only to the Coal Board but to private manufacturers of coal mining machinery?

Mr. Ogden: That is an extremely useful development. When the door was opened for Western trade and development in mainland China, the National Coal Board was one of the first to investigate the possibilities. I am not disagreeing with the hon. Gentleman about the benefits that we gain. However, I believe that he will agree that if more attention could be given to such development, it would assist not only the Coal Board and British manufacturers of coal mining machinery, but British Steel.
I should like to ask the Minister to draw to the attention of his colleagues, especially in the Department of the Environment, the unnecessary difficulties placed in the way of the National Coal Board by planning procedures. There has been reference to the Vale of Belvoir and to Selby. It takes 10 years to develop a new pit. If the United States—the land of free enterprise—needs only five years, even with its different geological structures, whereas our planning of replacements—I do not mean renewals—takes 10 years before even half a tonne of coal is produced, there is a need for investigation. It is not a matter of difficulties over safeguarding the environment or conservation. It is simply that if other countries can plan over shorter terms, we are missing opportunities.
We are trying to develop, plan, produce and consume our own resources and our own security for the future on a month-to-month and year-to-year, basis. That is no way to gain the maximum benefit for the industry. An attempt should be made to bring together the unions, the Government, the NCB and the consumers to decide what kind of industry and scale of production will be possible not only in the 1980s but in the years after 2000. We should then gain the long-term benefits that the coal industry can and should be able to provide.

Mr. John Ryman: rose—

Sir Anthony Meyer: rose—

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Sir Anthony Meyer.

Mr. Eadie: On a point of Order, Mr. Deputy Speaker. I am all for free speech, but it is a gross abuse of the House when hon. Members walk in to the Chamber and seek to intervene even though they have not heard the opening speakers or listened to the debate. To intervene in those circumstances is a gross liberty and an abuse of the House.

Sir Anthony Meyer: I should not have intervened, for the reason mentioned by the hon. Gentleman, had it not been for the fact that his hon. Friend rose to be called. He, too, has not been present until now.

Mr. Eadie: That is not true.

Sir Anthony Meyer: I want to begin my speech by apologising for not having been present, because I have been—

Mr. Eadie: On a point of order, Mr. Deputy Speaker. My hon. Friend the Member for Penistone (Mr. McKay) has been here throughout the debate—if that is the hon. Friend to whom the hon. Member for Flint, West (Sir Anthony Meyer) is referring.

Sir Anthony Meyer: I was referring to the hon. Member for Blyth (Mr. Ryman).

Mr. Ryman: Further to that point of order, Mr. Deputy Speaker. Until recently I have been in a Committee upstairs dealing with a strong constituency interest. I shall try to catch your eye later if I may. I apologise for not having heard many of the speeches so far.

Sir Anthony Meyer: I am grateful to the hon. Gentleman. He has made my point for me. I have similarly been on a Committee upstairs.
I shall be extremely brief. The hon. Gentleman knows the point that I am going to make, which I must put on record. If I had not intervened now I would have done so during the speech of my hon. Friend the Minister. The whole matter would have been dealt with a long time ago if the hon. Member for Midlothian (Mr. Eadie) had kept his temper.
My hon. Friend knows of my deep concern over the pilot project for obtaining oil from coal at the Point of Ayr. I can deduce what has been said in the debate and I dissociate myself from the allegations I have heard the hon. Member for Midlothian make from the Opposition Front Bench on previous occasions about the motivation of the Minister in this matter. I am satisfied both of the Minister's good faith and that he is determined to allow this pilot project to go ahead if possible.
I wish to question not the Minister's good faith, but the basis of the calculations by the Department in arriving at decisions in matters such as these. Inevitably, decisions are reached in the light of calculations drawn from purely British considerations. It has been my contention throughout that we ought to examine decisions such as this in a wider context. A project that may not be viable as a British project could become viable if it were examined in the wider European context. I know that the European Coal and Steel Community, the high authority, is making a contribution by way of both loan and grant to the project, but if the project were defined as a European project it would attract a much larger contribution, and I should like to see the Government going all out to get such a higher contribution.
Labour Members cannot join in on that tack, because every time it has been proposed from the Conservative Benches that there should be more co-operation in matters of energy with our partners in the European Community they have jumped against it as hard as they could. I remember the right hon. Member for Leeds, South (Mr. Rees) joining in to condemn ferociously any attempt to coordinate energy policies with those in the European Community.

Mr. John Ryman: I wish to apologise, as I already have done, for not being present earlier. I was on a Committee, but I have attended debates whenever possible.
I have a constituency point to make tonight. I represent a coal mining constituency. I wish to draw to the attention of the Minister, as I have on a previous occasion when he

was good enough to see me privately in respect of a particular pit, the severe problems facing the coal mining industry in the north-east of England, in Northumberland and Durham.
I do not share the complacency that seems to exude from some of the speeches so far tonight about the performance of the National Coal Board. Irrespective of what Government have been in power over the past 12 or 15 years, the systematic policy of the National Coal Board in the North-East has been to close pit after pit. It has done that irrespective of the merits of the situation. It seems to be a determined policy of the National Coal Board to indulge in the wholesale closure of pits in Northumberland and Durham, irrespective of the quality of the coal in those pits, the productivity or the longer term prospects.
The Minister will recollect that I came to see him less than three years ago about the Eccles colliery in Shiremoor where 550 men were producing good quality coal. I asked him to intervene in the proposed closure of the colliery. He received me courteously, made the usual inquiries, and then told me that he was unable to interfere because the correct procedure was being followed.
The result of that closure, which was the third closure in Northumberland within two and a half years of the small type of pit employing between 300 and 600 men. is that there is only one large pit in my constituency, Bates' pit, which employs just under 2,000 men and has the highest productivity in the country pro rata, as will be seen from the table in The Miner and other coal mining magazines. There has been no attempt to reverse the policy of the NCB. This is not party policy. It occurred under the Labour Administration as well. The NCB has systematically picked off pit after pit, knowing full well that it was dealing with an area of high unemployment and with no prospects of alternative employment if the pits were closed.
The tactics of the NCB in the North-East are always the same. The area director of the NCB went on television and began a wholesale public relations campaign exaggerating the subsidence problem of the Eccles pit. He hoped that that would dilute opposition to the closure. The engineer's report on the pit was marginal, but it was the subsidence factor that whittled down the opposition, because local residents were impressed by the NCB's argument, exaggerated as it was.
There was also the Government's lamentable performance in the weeks before the change of Minister when there was the threatened wholesale closure of many pits involving huge numbers of redundancies. This was avoided at the last moment only by strong action by the National Union of Mineworkers. Despite that victory, I am in a quandary. I believe that the essential tactics of the NCB are still the same, but, instead of involving itself in wholesale closures, it will do the job by picking off the pits one by one.
I want the Minister to know that there is great anxiety in Northumberland, Durham and Tyne and Wear about the intentions of the NCB and of the Government. Further restrictions have been placed on the cash limits of the NCB. I recognise that the Bill mitigates that to a slight extent, but there is still grave anxiety as to how serious the Government are in their encouragement of the coal mining industry. This is heightened by the open secret that the Government intend to apply for permission to build a nuclear power station at Druridge Bay in Northumberland, the whole purpose being to make that area the centre for


nuclear energy in the North-East of England, coupled with the policy of using the Cheviots as a nuclear dumping ground.
The Secretary of State referred to this matter when he announced the terms of reference for Sir Frank Layfield's inquiry into Sizewell in Suffolk in January of next year. The Minister may remember that, in answer to a supplementary question, the Secretary of State said that the Druridge Bay inquiry in Northumberland would follow the Sizewell inquiry next January.
What are the Government's intentions towards the coal mining industry in the north-east of England where there is a great deal of anxiety? Many people working in the industry are so discouraged by the prospects that reluctantly they are leaving the North-East for coal mining centres further south. The Minister recognises the problem and is rightly concerned about it. If the Government impose cash limits, the NCB's policies in the North-East will be accelerated and further pits will be endangered.

7 pm

Mr. Peter Hardy: It would be impertinent of me to take long, because I have not been in the Chamber for all the debate. I have been detained in the Committee on the Oil and Gas (Enterprise) Bill, which is different from the Bill that we are considering. That measure is unacceptable, whereas we can accept this Bill, perhaps with mean reluctance, as being necessary.
My hon. Friends have probably dealt with the matters to which I shall draw attention, so my remarks will merely emphasise them. We have a successful coal industry. The Government may have some reservations about it, but any examination of the industry by the House or from outside will demonstrate that it is successful. It is by far the most successful coal industry in Europe. It is the test-bed of an important mining engineering industry. It must be retained on an adequate scale for that purpose.
The Minister will confirm that recent results demonstrate that the industry is determined to maintain its success and that it has reached a high level of success in recent weeks. Although it is a public sector enterprise, Government Members must recognise that the industry is successful and important and must be sustained.
My hon. Friend the Member for Blyth (Mr. Ryman) referred to closures in the North-East last year when the furore was on and two pits were singled out for attention. One was in my constituency, and it was closed last September. It was closed because there was agreement that further investment would take place. One agreement involved the Brookhouse colliery nearby. There was also to be an enormous investment—the largest in any colliery—at Maltby. That investment is now under way and will provide 500 jobs. It was a pity that Independent Television News said that 600 jobs would be created immediately, three days after the announcement of the capital investment was made.
The closure of Orgreave came because there was to be alternative investment in the area. That is why it is essential, not merely for Selby to proceed, but for other new fields to be developed. I refer once again to the advisability of the Belvoir development. The Minister has heard me refer to that before.
It is essential to maintain the path of investment for the sake not only of the mining industry but of the mining

engineering industry. It is important to promote the established success, which has just been re-emphasised by the most recent figures.
I do not apologise for referring to the need for the House to consider properly the environmental problems associated with the industry. The Flowers committee report is important. It should receive a higher priority in the determination of public expenditure. It would be a splendid gesture if the Government found time for a day's debate on that important topic. It is important to the coalfields of Britain, which are themselves important to Britain. The recent figures and achievements establish and reaffirm that importance.
I give the Bill a modest welcome. I hope that in dealing with the coal industry the Government will not go down the road that is wasting our time in the Standing Committee on the Oil and Gas (Enterprises) Bill. The policy adopted for the coal industry during the last two years should be maintained.

Mr. John Moore: With the leave of the House, I shall reply to the debate.
The debate has been extensive, but none the less welcome. All hon. Members who have participated have a commitment to the industry. I understand the limitations on some hon. Members who have to occupy themselves elsewhere on other business.
Most of the debate, has been related to the Government's commitment to create a financial framework to allow the deep mine industry to move in the successful direction that it is going. The hon. Member for Rother Valley (Mr. Hardy) was right to emphasise that. Ours is the best developed, most efficient deep mine coal industry in the world. I pick up the hon. Gentleman's point about Western European comparisons.
The Flowers report is a crucial document. We discussed it briefly on Second Reading. It merits attention. I am not capable of deciding on the business of the House, but I shall draw the hon. Gentleman's remarks to the attention of my right hon. Friend the Leader of the House. We are still taking advice and evidence from all parties.
The hon. Member for Liverpool, West Derby (Mr. Ogden) made one or two important and useful points. However, I am not comfortable when he talks about tripartite matters. He spoke of going beyond tripartite to other areas of debate. Those who seek to represent the whole of the community, beyond the specific areas of the coal industry's management and its unions, should debate the matter in the House.
The hon. Member for West Derby expressed anxiety about the number of coal Bills and coal debates. We would share some of his worries if such Bills and debates sought to change the need to make long-term decisions about the industry. I sympathise with the hon. Gentleman's attitude, but we must differentiate between Parliament's need, in so far as it is concerned with public moneys, and the need to scrutinise expenditure and review policies. That is legitimate when long-term circumstances and strategies change. We have a fair degree of understanding and similar attitudes on that.
The hon. Member for West Derby talked of the potential for exporting the Coal Board's skills. I was glad that at that point the hon. Member for Penistone (Mr. McKay) intervened to draw our attention to the many places in the world that have benefited, and I hope will


benefit, from the extraordinary engineering, managerial and other skills associated with our coal industry. Places all over the world benefit from its skills, and the industry brings not only money to the board, through consultancies, but the important prospect of contracts, and therefore jobs, to all the great companies involved in manufacturing machinery. Many companies gain from the board being involved overseas. None of us should under-estimate the excellent work done by the board and the industry in that connection.
I hesitate to refer to the hon. Member for Ashfield (Mr. Haynes), because his blandishments are becoming almost embarrassing. I shall find myself in considerable difficulty if he does not stop being so nice to me. I appreciate his recognition of my interest in the industry, but it is becoming a little uncomfortable.
The hon. Member for Don Valley (Mr. Welsh) apologised to me for not being with us for the end of our debate. He has other constituency and public business to attend to. He raised many important points. I was interested in one matter in particular, as I am sure were all hon. Members who visited Bretby. I refer to the nature of long-term research in the industry.
Those who know about the coal industry's research at Bretby will welcome the hon. Gentleman's remarks. This area has shown steady growth in real terms in recent years, consistent with the board's drive to improve coal mining technology. For example, in the Bretby research area total expenditure in 1980–81 was £33·4 million, and revenue expenditure for 1981–82 is expected to be similar to expenditure last year.
We should put the qualities and abilities of Bretby on the record. The expenditure covers all aspects of mining, research and development, face technology, control and automation, comprehensive monitoring, tunnelling and basic research. The NCB does not seek Government support for such work. Those of us who know about the seismological computer work at Bretby know that it is a world first.
Beyond that, coal research accounted for £13·3 million in 1980–81, which covered short and long-term work aimed at extending and improving the markets for coal. This includes work on coal combustion systems, handling ash disposal, as well as liquefaction and gasification. I shall refer to liquefaction later.
The hon. Member for Ogmore (Mr. Powell) raised many points. He legitimately referred to the Welsh coalfields and the problem of Margam. I remind him that we are debating the overall capital investment programme of the industry. As I said at the beginning of my speech, in 1982–83 we look to a figure of £886 million in capital investment against the current figure of £805 million for this year. Those are substantial sums of money. However, I recognise and understand the point he made about Margam.
I recently visited Cynheidre, an excellent pit in South Wales, where I was deeply impressed by the dedication and skill of the men. They have done a splendid job, particularly during the difficult conditions of this winter in that part of, the country. However, decisions for particular projects are for the board. As the hon. Member for Ogmore told us, the economics of the project are unfavourable. The estimated operating cost of obtaining coal from the pit would be about two and a half times the national average. Nevertheless, the board's coal mining engineers are exploring ways of making the project viable.
However, during recent tripartite discussions the NUM recognised that it will be no service to industry, or to Wales, to allow the board to take on uneconomic schemes that could be a long-term burden. However, I shall draw the board's attention to the points made by the hon. Gentleman.
The hon. Gentleman is confused on the question of subsidies. He said that we cannot compete against the other European coal industries because they receive higher subsidies than the NCB. As I have repeatedly said, I do not deny that. The hon. Gentleman suggested that we cannot compete because of those subsidies. However, it is the investment realities that count.
On Second Reading I gave the 1981 estimates from the European Commission for investment in coal production. The figures are, for Belgium £27 million, France £34 million, West Germany £265 million, and the United Kingdom £698 million. We are selling our coal to those markets. World-wide, we are net exporters of coal, and the countries that the hon. Gentleman says we cannot compete with are importing coal. Belgium imports over 63 per cent. of its requirements, France over 61 per cent., and West Germany over 10 per cent. with higher imports planned. We can more than compete in those markets.
The hon. Member for Penistone made a thoughtful speech. He reminded us of the importance of the coal industry to the private sector. That important point should be drawn to the attention of people outside the House. The board spends about £1 billion each year, and 98 per cent. of it is spent in the United Kingdom. That is a significant sum against a turnover of about £4 billion.
The hon. Gentleman also referred to widows and taxes. The hon. Member for Bolsover (Mr. Skinner) and other hon. Gentlemen also referred to that problem. I am conscious of the point that they are making. However, hon. Members will understand that I cannot comment on general questions of taxation which are in the province of my right hon. and learned Friend the Chancellor of the Exchequer. However, I shall draw his attention to the remarks that have been made in this debate by at least four hon. Members.
The hon. Member for Penistone also raised the subject of subsidence. Although this matter is still under consideration, because of the Flowers report, further discussions are clearly under way. I shall put on record the current position, as the Government see it.
The 1957 Act provides that the National Coal Board remedies or pays compensation for damage caused by coal mining subsidence. The statutory provisions were augmented in 1976 by the board's introduction of a voluntary code of practice, covering such items as compensation for losses to household goods, furniture, crops, stock-in-trade, and plant. In recent years it has been the board's practice to set up subsidence liaison committees, whenever it anticipates that there is a danger of surface damage which might have an appreciable effect on residential communities. In this way, all those who are likely to be affected are informed of their rights to claim, how to act in an emergency, and how to get in touch quickly with board officials and contractors to deal urgently with any repair work that might be needed.
The many improvements in dealing with claims is evidenced by a 100 per cent. increase, in real terms. of the annual amount paid in compensation since 1976. In 1980–81 the amount paid was £54·7 million. I am sure that


we shall return to this topic again in other debates, but I thought that it would be useful to remind the House of the changes in this connection.
The hon. Member for Penistone also raised the subject of bronchitis and emphysema. We had a modest debate in Committee on this matter. The subject is kept under constant review to take account of developments in knowledge. A DHSS paper that covered the topic, among others, was submitted by the tripartite working party, which I chair, and was considered at its meeting last July. It said that there was no reason at present for moving from the view expressed in the review which the Industrial Injuries Advisory Council published in 1973. That review said that bronchitis and emphysema could not, on the evidence available, be prescribed at present as industrial diseases in their own right.
The hon. Member for Bolsover, in a sterling contribution to our debate, left me feeling that I really cannot win when it comes to the Coal Industry Bill. I thought that we had sought to provide considerable additional funds to the industry, but obviously, by seeking to increase its loans, we have hung debt around its neck. Most organisations, whether private or public, welcome the opportunity to borrow funds, even at the risk of paying interest. However, I reconcile myself to my inability to win in this connection.
The hon. Member for Bolsover recognised the particular difficulties over the social cost and burdens of the industry of the past. I understand what he says, and I am sure that none of us would seek to distinguish the social costs from the other forms of grants related to the industry. I shall pursue the point that he raised about those whom he suggested were statutorily excluded from concessionary coal. I shall write to him on that one.
The hon. Gentleman spoke also about improvements in productivity and the point beyond which improvements cannot go. He talked about retreat mining. The hon. Member for Ashfield was interested in this subject, but I shall not pursue his William analogy and his wheel that never stopped turning. No one who has been at Bretby can assume that there is not further potential for productivity increases.
Most people accept the varied nature of the mines that we are looking at. A mine such as Cynheidre in South Wales has a floor movement that does not necessarily exist in other areas and a certain number of men working there, compared with the number of men who do not need to be involved in floor movement in other mines. So one can understand the different productivity in different mines.
No other country can begin to compete with Britain in longwall mining techniques and mechanisation at the face. I note the remarks made by hon. Members, including the hon. Member for Ashfield, about the problems of shaft capacity and the inability to move coal from the face to the pithead. Those are areas where important improvements in productivity can be seen. I accept the limitation question, but there are other areas, from face to pithead, where there are many modern developments and where the board is in the lead. Last year I visited Rawdon colliery, where new underground vehicles are tested.
As I told the House on Second Reading, the National Union of Mineworkers has proposed that the Government should finance an extension of the National Coal Board's pneumoconiosis compensation scheme so that persons

previously excluded from the scheme as commuted cases, or their widows, will receive £600. The question of commuted cases is of long standing. As I said in my letter to the hon. Member for Bolsover, and to other hon. Members, including the hon. Member for Midlothian (Mr. Eadie), I am giving it the utmost sympathetic consideration.
The hon. Member for Midlothian, in a lengthy speech—the Bill merits a lengthy speech and I do not seek to be critical—raised a number of issues while recognising that there is support for the Bill from both sides of the House. First, he referred to the exceptional activities of the industry in the difficult days of January and February in some of the worst weather conditions Britain has experienced this century. The industry showed its ability to move coal and to continue to achieve high productivity levels. The hon. Gentleman rightly drew our attention to those levels and to the fact that in February all-time records for productivity were achieved. The industry is to be commended for that.
The hon. Gentleman also referred to safety. We were all aware of the difficulties during the previous debate which took place shortly after the Cardowan incident. The House should know that only nine of the injured are still in hospital. They are all on the road to recovery and none is now in intensive care. The others are convalescing at home, but none has yet returned to work. That is good news to all who are concerned with the industry.
The hon. Gentleman also raised the old vexed subject of what is a subsidy and what is not. I understand those who look at the other side of the coin and argue that the industry's interest burden reinforces the need for subsidies. The operating and deficit grants for 1981–82 are £467 million. The total of those grants with social grants would be£567 million against an interest bill of approximately £350 million for 1981–82. Many companies would be happy to be able to borrow money and pay interest.

Mr. Eadie: Companies borrow and their borrowings do not count as subsidies. No company that borrows money and pays interest regards that as a subsidy. That is what we have said today, on Second Reading and in Committee. We resent the fact that the Prime Minister and the Minister always talk about subsidies when a nationalised industry has to borrow and pay interest. We object to that.

Mr. Moore: I shall repeat the argument on behalf of my right hon. Friends. The operating deficit and social grants are the subsidies to which we refer. They total £567 million for the fiscal year 1981–82. If the Government felt that the industries did not merit the subsidies, they would not be introducing them in the Bill.
The hon. Members for Midlothian, for Rother Valley, for Ashfield, for Don Valley and for Penistone referred to Belvoir. I hear what they say, but I must repeat what I have said before, and that is that it is a matter for my right hon. Friend the Secretary of State for the Environment.

Mr. Haynes: The hon. Gentleman could not care less.

Mr. Moore: My right hon. Friend is considering the report of the inspector who conducted the public inquiry into the National Coal Board's proposals and will announce his decision as soon as possible.
My hon. Friend the Member for Flint, West (Sir A. Meyer) has been very assiduous, as I would expect him to


be, in the pursuit of his constituency interest in liquefaction. The issue has been raised by the hon. Members for Don Valley and for Midlothian. I understand the passion of the hon. Member for Midlothian, who is almost the godfather of the project. However, I hope that he will not seek to hurt the project by suggesting that the record will not be put correctly from the Government Dispatch Box.
The board's decision to proceed with a single process facility was based on the preference of the prospective commercial partners for the liquid solvent extraction process, which on paper gives a better yield than the less developed super critical gas extraction process. The Department made it clear on 15 June 1981 at a meeting of the National Coal Board—BP liquefaction steering committee that the £5 million support offered by the Government would apply in full to either a single or a dual process facility.
I must correct certain statements by the hon. Member for Midlothian on Second Reading which he repeated tonight. The agreement between the Government and the board was signed by the hon. Gentleman. It was one of the first documents that I studied when I took over his job. The document was signed on 19 February 1979. The Government's support in that contract was limited to £800,000. It covered design studies, technical support and tender evaluation. The press release for the day made it clear that a separate agreement would be required for the construction phase.
The Government have more than honoured the design agreement. They have gone beyond it and agreed to pay a share of the cost of a proving run at the small integrated plant at the coal research establishment last year and a further run this spring. I recognise and understand the hon. Gentleman's impatience, but the proving runs take time. They are necessary if we are to put the project on a firmer footing and make participation in the construction phase more attractive for the private sector.
The project is moving forward. The commercial discipline and technical experience of the prospective partners are making a valuable contribution that can only strengthen the project. The doubts raised by Labour Members will serve only to set it back. The construction of the pilot plant is a matter for the sponsor steering committee. I expect timing to become clearer towards the summer.
The Department has told the board of its broad views on the terms of an agreement to support construction and we await the board's reply. The background to the decision to limit our contribution to £5 million was fully explained to the House on 22 May 1981. The only change since then is that the price of oil has fallen significantly.
The hon. Member for Midlothian referred, legitimately, to the chairmanship of the NCB. Sir Derek Ezra has worked for the NCB since 1947. He has been a board member since 1965. He was appointed chairman in 1971. I hope that there will be other opportunities for us all to wish Sir Derek well before he retires. However, this is an appropriate occasion to congratulate Sir Derek on his period of chairmanship of the NCB and to acknowledge

our appreciation of the work that he has done for the industry. That is something that I am sure we all wish to see placed on the record.

Mr. Ogden: I am sure that the entire House will wish to join in the tribute that the hon. Gentleman has paid to the chairman of the Coal Board. There is a great deal more fire and work left in Sir Derek and we are not saying goodbye to him entirely. However, the uncertainty about who the new chairman will be is causing difficulty. We know who the president of the National Union of Mineworkers will be. We know for a little while who the Government will be. It is not unusual in industry for a chairman designate to be appointed.

Mr. Skinner: We do not know who the chairman of the Social Democratic Party will be.

Mr. Ogden: We always say in the NUM that everything comes to him who waits.
It is not unusual in an industry, nationalised or otherwise, for a chairman to know that he will retire on a particular date and for his successor to be known in advance of that date. The sooner these dates can be provided and the new chairman brought in, the better it will be for the industry.

Mr. Moore: I never thought that I would call the hon. Member for Bolsover in aid. The SDP squares every circle, does it not? Not only do hon. Gentlemen demand an answer, but they tell me that everything comes to him who waits. That is a perfect answer. We are in the process of finding a successor to Sir Derek and it would not be appropriate for me to comment further at this stage.

Mr. Haynes: The Minister ducked the issue of Belvoir and he is now ducking the issue of the chairman of the National Coal Board. Given the feeling in the industry, and that people want to know who it will be, the Minister should at least give us some guidance. May I at least have an assurance that one will not be imported? If that happens, the Department will be in real trouble.

Mr. Moore: I was most unwise to draw attention to the flattering remarks made about me by the hon. Member for Ashfield. I know that he would want me to dissociate myself from any press comments that would seem to suggest that I, an erstwhile merchant banker, might even be considered for such a post. We are in no way seeking to duck the issue. We recognise both issues. I have said all that I am going to say on the subject of the Belvoir area and on Sir Derek Ezra's successor. We congratulate Sir Derek Ezra on the long service that he has given to the industry.
The Bill provides a financial framework for the whole of the coal industry. The Government and the House, as well as those in the mining industry, wish it well, as does the country, because—as many hon. Members have said—it will benefit from a successful coal industry. In that spirit, I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Coal Industry

The Under-Secretary of State for Energy (Mr. John Moore): I beg to move
That the draft Mineworkers' Pension Scheme (Limit on Contributions) Order 1982, which was laid before this House on 11th February, be approved.
Perhaps, Mr. Deputy Speaker, we could discuss also the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) (Amendment) Order 1982.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): If that is for the convenience of the House, so be it.

Mr. Moore: The first draft order is similar to orders which the House has considered at about this time each year since 1977. Section 2 of the National Coal Board (Finance) Act 1976 empowered the Governmènt to make contributions of up to £18 million per year for 20 years for the purpose of reducing the deficiency in the mineworkers' pension fund attributable to those persons who had left the industry before 6 April 1975. The rapid contraction of the industry during the 1960s meant that by then such persons outnumbered the active contributors to the fund, and it was not considered right to ask the industry itself, or the active contributors, to carry this burden of the past.
The 1976 Act also allowed the level of contributions to be raised by statutory instrument to take account of the increases in deficiency occasioned by increases in the pensions paid to the pre-April 1975 pensioners. As I have said, this has been done every year since 1977, so that currently the permitted level of contribution stands at £49·28 million per year. Last September, the basic mineworker's pension was raised in accord with the retail price index, from £8·92 to £9·93 per week. We are advised by the Government Actuary that the consequent increase in the deficiency could be met through an annual payment of £5 million for the remaining 14 years of the support arrangement. Therefore, we have laid before the House the draft of an order which raises the permitted level of contributions to £54·28 million.
The 1976 Act requires the Secretary of State to lay with the draft order a statement explaining the considerations that have led him to conclude that the order should be made. The statement sets out in detail the points that I have touched upon. It also points out that the extent of support that the Government are giving to the board's operations generally does not give any scope for contending that the board could meet the additional cost of £5 million during either this financial year or next. For later years, the position can be kept under review. The order empowers the payment of £54·28 million per year up to 1994–95, but follows the wording of the original 1976 Act in not compelling the Government to pay all or any of this sum.
I turn to the second draft order. On Second Reading of the Coal Industry Bill, and again during the discussions in Committee, I recalled the substantial improvements in benefits under the redundant mineworkers' payments scheme that were introduced through the amendment order that the House considered on 18 March 1981. The present amendment order introduces no such radical measures; it simply tidies up a number of features of the scheme and updates the level of benefits.
Each year there is introduced a new table of basic benefit under the redundant mineworkers' payments

scheme, payable now for up to five years in addition to unemployment benefit or its equivalent. The table applies to persons made redundant during the subsequent year. The level of basic benefit is adjusted to preserve the overall level of benefit at about two-thirds of previous earnings, taking account of increases in unemployment benefit, which are payable in addition, and of certain other factors. In addition, the new tables introduced in the past have often increased the maximum level of earnings reckonable in the assessment of benefit. This year is no exception. The increase is from £130 to £140 per week.
As an example of how the table works, a married man made redundant on or after 6 April with pre-redundancy earnings of £140 per week will receive £55·14 per week scheme benefit, plus £36·40 unemployment benefit in his first year of redundancy—a total of £91·54 per week, which is approximately two-thirds of £140. In subsequent years, of course, his scheme benefit will be increased in accord with the cost of living, and unemployment benefit equivalent will also be paid at the current rate.
There are a few other minor upratings and amendments. In particular, the position of the few people who have reentered coal industry employment following an earlier redundancy and payment of weekly benefit is clarified. If such a person is made redundant for the second time on or after 6 April, his payments of benefit will resume and will now continue at the approximately two-thirds rate for a total of five years, irrespective of whether his earlier redundancy was before of after 11 March 1981, provided that his period of re-employment lasted at least a year. In addition, he will be able to elect whether to regard his first or second redundancy as that which determines his benefit for all purposes. This is a complex amendment. It affects very few people, but makes their position fairer.
In the light of all those points, I seek the agreement of the House to both orders.

Mr. Alex Eadie: I do not wish to detain the House unduly, but I have some comments to make. As the Under-Secretary of State said, the proposed measures are an improvement on the existing situation. The Secretary of State's statement and the draft instrument explain why the 1982 order contains an increase from £49·28 million to £54·28 million. As the hon. Gentleman said, that is an increase of £5 million.
I do not wish to rehearse the reasons, because they are set out in order and the statement. In the explanatory note, which is not part of the order, four changes have been set out. I think that the Minister is aware—as some of my hon. Friends are—that discussions take place between the unions and the Department of Energy. The unions advanced what seemed to them to be improvements in the RMPS. In their representations, they put forward a number of suggested changes, which I shall list as it is important to put them on the record.
First, they said that during the first year of benefit single men or married men with working wives were at a disadvantage as their benefit would be calculated on the assumption that they were in receipt of unemployment benefit allowance for an adult dependant.
Secondly, the unions suggested that, by virtue of the requirement to register as unemployed, members who were invited to visit their families or who took a holiday would be unable to qualify for RMPS benefit during the weeks in question.
Thirdly, the unions said that the requirement to register as unemployed had been a bone of contention with their beneficiaries for many years and asked the Government to adopt a more flexible approach.
Fourthly, they said that a member made redundant under the RMPS could qualify for the concessionary coal allowance under the industry agreement that he would have received had he retired at 65, but that if he took up any employment following redundancy he would lose his concessionary coal entitlement—for life, in the majority of cases. Many of my hon. Friends deal with such cases. Sometimes we cannot for the life of us understand why that should happen.
The unions' fifth point was that the RMPS was conditional on the employee becoming redundant, mainly as a result of a colliery closure or a reduction in the services there. The unions drew the attention of the Department of Energy to a number of employment conditions within the mining industry that were not as yet covered by the scheme. The Minister and his officials must be aware that we are here discussing other ancillary undertakings in the mining industry.
The unions also asked the Minister for a more realistic earnings ceiling in the light of the earnings pattern in the mining industry. He made passing reference to that. As I understand it, the main provision is an increase from £130 to £140 per week in the limit on earnings reckonable for weekly benefits for persons made redundant on or after 6 April 1982. The Minister touched on that also. The new limit represents a larger advance than recently provided with respect to payments under the Employment Protection (Consolidation) Act 1978. That is why I said that the proposals that the Minister has announced represent an advance. The Opposition recognise that.
The second main effect of the orders is to tidy up some provisions relating to persons who have re-entered the industry and again become redundant, if they are made redundant for the second time on or after 6 April 1982. Those persons will be entitled to five years basic benefit, whenever the first redundancy occurred. It is made clear that the level of benefit may be based on earnings before the second redundancy.
My third observation is that the usual raising of the normal minimum level of basic benefit for all beneficiaries is in line with mine workers' basic pension. The Minister will be aware that there was a seminar organised to discuss the RMPS last year—I must also put this on record—at which some representatives of the union were present—"officials" in the sense of what one might call the civil servants of the union. A representative of the Department of Energy was also present.
I believe that some responses were put forward in relation to the rules of the scheme regarding unemployment benefit. The Minister may wish to comment on this. I understand that the subject of registration for unemployment and payment of benefit is being considered by the DHSS/Department of Employment working party, but I am not sure whether discussions are still going on or whether conclusions have now been reached. Can the Minister give any information on that? I am also told that the NUM is discussing with the board the concessionary coal provision for persons re-entering employment and that the Department of Energy has said that in the arrangements for eligibility to quality for RMPS

the present criteria are…fundamental to the basis of establishing RMPS, as a special Government scheme in recognition of the particular circumstances of the coal industry.
I stress once again that real progress has been made with the Minister's announcement about the orders. The orders achieve an improvement and we shall certainly support them. Nevertheless, to some extent, they are born out of contraction and redundancy in the industry. I put on record once again the figures that I gave when my hon. Friend the Member for Bolsover (Mr. Skinner) spoke about this. Since last March, 13,000 men have left the industry, of whom some 8,000 were made redundant. The Minister may wish to confirm those figures, as I know that his resources for checking figures are greater than mine, although I think that my figures are correct. The Opposition certainly approve the orders, but it is sad to note that, from March to March, 1981–82 has seen the highest rate of pit closures since 1971. Therefore, although we appreciate the progress being made and are grateful for the way in which the Minister has introduced the orders, there is nevertheless an element of sadness because contraction of employment in the industry is involved.

Mr. Jack Dormand: I shall be brief. I wish to raise a matter relating to concessionary coal. For some years this matter has caused concern in my constituency—and, I suspect, in other parts of the country—and I regret that the Minister made no reference to it.
Miners' widows aged over 60 do not qualify for concessionary coal. I say immediately that I do not think it is a problem of easy solution. Nevertheless, some injustice is being caused. There are anomalies and inconsistencies in the present arrangements.
In my area, and perhaps in other coalfields, it is possible for a man to work for 46 years in the mines and, if he dies before he becomes entitled to the concession, for his widow to be refused it. That seems a manifest injustice. Again, if a man retired early through ill health and was not in receipt of concessionary coal, his widow will not receive it.
There is a rule banning the receipt of concessionary coal by any widow who works for more than 16 hours in one week. That is particularly harsh. Many women find it difficult to manage on the pension they receive. Therefore, they are forced to work and so forfeit the coal allowance.
It is galling and frustrating for widows who are affected in these various ways to know that women in other parts of the country are not so affected. There is a crying need for a national agreement on this matter. I find it difficult to understand why it is taking so long to have it established. The Durham miners, with whom I am proud to be associated, have pledged their support for it. I am sure that miners everywhere will share their view.
The question of cost will, of course, be raised, but there can be little doubt that it will be very small. In the debate on the Coal Industry Bill, many millions of pounds were authorised. A scheme such as I am proposing would cost considerably less than £1 million. I hasten to add that I have not seen any costing of the scheme, nor have I attempted to make one.
No section of the community has made a more effective contribution to society than the miners, but they would be the first to say that that contribution could not have been made without the dedication of their wives. Miners' wives


have to endure all the worries of this unique industry. The time has now come to rectify the shortcomings and anomalies in the present arrangements. The undertaking must be carried out, with full consultation with the National Union of Mineworkers which, I am sure, will give every possible help.
The need is urgent. I ask the Government to take the initiative now to bring about a more just settlement of this unhappy situation.

Mr. John Moore: With leave of the House I shall touch briefly on the points that have been made, because I imagine that hon. Members will want me to come back to them in greater detail in correspondence.
The hon. Member for Easington (Mr. Dormand) raised a point to which I said I would return in detail. The details of the agreement on the provision of concessionary coal are arranged between the board and the union. The hon. Gentleman asked about the Government's contribution to the costs, but I have already made a commitment to pursue that point.
The hon. Member for Midlothian (Mr. Eadie) asked questions, of which I am aware because they are raised through the normal negotiating machinery, concerning payments of married rates, holidays, the requirement to register, concessionary coal and the conditional relationship to RMPS payments relating to closures in the industry. He also commented on the need for a more realistic earnings ceiling. I shall come back to him on that, but he will be aware that the union and the board are discussing these particular points with the Government.
The hon. Gentleman had the figures relating to the redundancies for the year generally right, but I think it would be wiser to have the figures officially on the record. I shall try to do that through a letter or by a specific parliamentary answer to him.
It might be useful to put on record the part of the review to which the hon. Gentleman referred and on which he asked to be updated regarding the problem of registration relative to RMPS benefits. The conditions have not changed—they have been the same since 1968—and the problems associated with them have not changed. This is a long-standing issue which is wider than the RMPS. It affects everyone receiving unemployment benefit. It was considered by a joint study group of officials from the DHSS and the Department of Employment. The officials who looked at the whole system of benefit payments in consultation with Sir Derek Rayner last year, recommended that people should be able to miss one fortnightly signing in a year. The timing and introduction of changes in procedures based on this recommendation are still being considered by my right hon. Friends the Secretaries of State for Social Services and Employment. Obviously, I shall draw their attention to the points that have been raised in the debate. My Department has a particular interest because of its relationship to the RMPS in this particular area.
I appreciate the welcome that has been given to the orders. They represent a tidying up and a modest improvement. I have taken note of the points that have been made and I will try to come back to hon. Members on them. I hope that the House will allow the orders to go forward.

Question put and agreed to.

Resolved,

That the draft Mineworkers' Pension Scheme (Limit on Contributions) Order 1982, which was laid before this House on 11th February, be approved.

Resolved,

That the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) (Amendment) Order 1982, which was laid before this House on 11th February, be approved.—[Mr. John Moore.]

European Community

The Financial Secretary to the Treasury (Mr. Nicholas Ridley): I beg to move,
That this House takes note of the Annual Report from the Court of Auditors concerning the financial year 1980 together with the replies from the Institutions (European Community Document No. 11456/81) and supports the Government in seeking to ensure the sound management of Community finance.
The purpose of this debate is to give the House an opportunity to express its views on the Court of Auditor's report concerning the Community's 1980 financial year so that Her Majesty's Government can take account of them when the Council considers the report. The Government agree with the Scrutiny Committee and the hon. Member for Birmingham, Erdington (Mr. Silverman) on the importance to be attached to this whole subject. This debate is taking place at an appropriate time in relation to consideration of the report in Brussels.
The report is at present being discussed within the Council, which will very soon be deciding on its recommendation to the European Parliament on the discharge to be given to the Commission. It will be possible to take full account of the views of the House when deciding the United Kingdom's position in the council on the recommendation.
The House will be aware that the recent fifth report from the Public Accounts Committee gives a full description of the tasks of the Court of Auditors, its organisation and the way in which it carries out its tasks. It may help the House if I describe briefly the procedures of the production of the report and its subsequent consideration.
The procedures are laid down in the treaty and amplified by more detailed rules in the financial regulation. Briefly, the Commission is required to submit accounts relating to the implementation of the budget to the Council and Parliament by 1 June of the year following that to which they relate. The Court of Auditors is required to send its comments on the accounts to the Commission and the other institutions concerned by 15 July. Each institution has to give its comments in reply to the court's comments by 31 October. The court is then required to submit its report, and the replies of the institutions, to the Council and the European Parliament.
The European Parliament is required to give a discharge to the Commission for its execution of the budget, acting on a recommendation by the Council, before 30 April of the following year. The financial regulation states, however, that if that deadline cannot be met the Parliament or the Council shall inform the Commission of the reasons for the postponement. In the past it has several times proved impossible to keep to the procedural timetable as described, and this timetable is indeed rigid and compressed. It is also, in our view, unrealistic.
Unfortunately, when the financial regulation which contains the timetable was last revised in 1977, the Court of Auditors had only just been set up. It did not have the time before adoption of the regulation to give a detailed opinion on it and lacked the practical experience on which to base a view. The United Kingdom at that time questioned whether the timetable was realistic. Other member States agreed that it was compressed but considered it was more important to ensure that the audit

was completed promptly. It is, of course, important that the audit be carried out promptly but not at the expense of thoroughness.
The financial regulation is once more under review, proposals having been made by the Commission for this purpose. Detailed discussion has not yet started in the Council, since the opinion of the European Parliament on the Commission's proposals is awaited. As a result, the court has had time to deliver its detailed opinion on the proposals and this will be available to the Council during its discussions.
During those discussions Her Majesty's Government intend to take up once again the question of the timetable. Audit, financial control and sound financial management are too important to be constrained by an unrealistic timetable. This is one major way in which we hope to improve the financial management of the Community.
The report before the House this evening is very detailed and raises a large number of issues. This is to be expected since that is the purpose of audit. There is a change of emphasis in this report compared with an earlier one, since the issues raised concern more the question of value for money than the more pedestrian questions of whether decisions were taken strictly according to the rules. The Government welcome this trend, since part of the court's remit is to consider whether financial management has been sound. It is also welcome because it shows that the court has come across fewer cases of failure to observe regulations strictly. This is encouraging.
I am sure that right hon. and hon. Members will take up a number of points raised in the Court of Auditors' report. We shall take careful note of any detailed points that are raised and refer them to the Council when it meets to consider the report, so that the views of the House are well known by the United Kingdom representatives at the Council. In so far as there is anything that I can do to comment on or elucidate any point, it may be for the convenience of the House if I seek leave to reply at the end of the debate.
I am sure that the House will understand, however, that I cannot answer for the implementation of the report, which will be for the Commission. The British Government's concern is to make sure that we do the most that is possible to ensure sound financial management of the Community, and that will be our objective in the coming weeks.

Mr. Robert Sheldon: The House, which listened to the Financial Secretary with interest, will have read with care the report of the Commmittee chaired by my hon. Friend the Member for Birmingham, Erdington (Mr. Silverman).
There are a number of financial aspects of the Community. Among the most important is the major disproportion between the amounts that we pay and the amounts that we receive back as a result of our membership. Another is the dominant role of the common agricultural policy, to which much reference is made in the House. A third is that which concerns us tonight—the question of value for money. The hon. Gentleman rightly drew attention to the way in which the Court of Auditors is concerning itself more and more with this most important aspect of its work.
The court was established by the Treaty of Brussels in July 1975 and came into being in October 1977, after ratification, so it is a relatively new body. It must be looked at in the light of the vast amount of work that it does, the need for support for that work and the need for its continuing inquiring role, which we must support whenever it produces reports such as that which we are debating.
The court consists of one member from each of the 10 member States. They serve for six years. The member from the United Kingdom is Sir Norman Price, who was the most distinguished chairman of the Board of Inland Revenue, and who is superbly qualified for the appointment. He is one of the great public servants that we have produced, who do not, in these sad days, always receive the recognition that great public servants should receive from the House and from the Government.
The court has a staff that is small in comparison with its task. It has an establishment of 284, of whom only 220 were engaged when the Public Accounts Committee visited the Commission in Brussels last November, and of whom only about 12 have recognised qualifications. Before we start expressing our dismay—and "dismay" is the right word—we must remember that in regard to our own Exchequer and Audit Department, which has a staff of 600 or 700, for nearly 20 years I and many others have continually deplored the lack of outside qualification.
The court and our Exchequer and Audit Department have difficulty in obtaining qualified staff. We know of the difficulties caused by the pay differential in accountancy between the public service and the private sector, which is large and not to the advantage of the public servant. However, there has not always been the interest in, and concern about, obtaining that type of expertise both in this country and—although I am much less qualified to speak about this—on the court.
I should like to confine myself to a few general questions of principle about how the court should proceed and then go on to a number of examples from the report.
Clearly we need to have a body such as the court. I suppose that we have always seen it as being analogous to our own Comptroller and Auditor General, though it has a more difficult task, because there are differing traditions within the Community.
In order to create and maintain confidence that public money is being used for the public good, the court will not be able to compromise in the way that many other European institutions can. There is a certain amount of fudging along the lines of communication. That is made inevitable by the difficulties of bringing together a number of different traditions, but, however inconvenient it may be, and however expensive it may be, to operate a system of control that can be fully justified we must go along this path; we must justify the trust which the placing of public money imposes on those privileged to disburse it. This is an essential task, and the difficulties and the cost must not affect the way in which it is carried out.
We must at all times be unhesitatingly on the side of the court in so far as it is carrying out that task, even when it is in conflict with the Commission, as we are—or perhaps I should say "as we should be"—on the side of the Public Accounts Committee when it comes into conflict with the Government. We must not be too complacent

about that, because there is on the Order Paper an early-day motion signed by several hundred hon. Members saying that the appointment of the Comptroller and Auditor General should be in the hands of Parliament, that he should not be selected by the Government of the day. The motion also says that he should inquire into matters such as British Leyland, as my hon. Friend the Member for West Lothian (Mr. Dalyell) constantly tells us. However, we do not have the power to order that.
We are asking the Community, which in some respects has more power to intervene, to extend that power still further. We must not be too complacent about the kind of advice that we give others when we are failing to take some of it ourselves.
The way in which the Executive dominates Parliament in the auditing of its accounts is scandalous. It is perhaps copied, but only slightly, by the way in which the Commission is attempting to dominate the court. That is the matter that is before us, and in it we must unhesitatingly be on the side of the court, as I am sure we and the Government are.
Following the court's report, the European Parliament gives a discharge to the Commission on how the budget has been implemented.

Sir Anthony Meyer: I do not want to make the right hon. Gentleman say more than he is saying. I am deeply interested in his speech, and am with him all the way. Does he accept that the logic of his argument so far is that if the Community is to function efficiently it must have at its centre an organisation that is in a position to override the differing views of bodies over-swayed by national considerations or by short-term political considerations, as the Commission sometimes is, and in a limited sphere to impose views which it is necessary to impose in the interests of the community as a whole? From that, certain other consequences follow.

Mr. Sheldon: I am not sure whether I fully follow what the hon. Member is saying. If he is saying that the Court of Auditors must command not only our respect but our support, I agree with that. That is the burden of what I am trying to say.
When I mention that the European Parliament gives a discharge to the Commission on the implementation of the budget as a result of the report from the court, I am reminded of the fact that Treasury Ministers must be happy that we do not have the same procedure in the House. Many of us wish that we had. The way in which the Administration are able to override so many of the areas that are the direct concern of Parliament is nothing short of scandalous. I am sure that if the House ever had the right to give such a discharge there would be many occasions on which it would fail to do so.
The report shows that there is a great deal of tension between the court and the Commission. There is even a quarrel over who has the last say, and the Public Accounts Committee did a notable service when it visited Brussels. In its report of 9 December 1981 it talks about the permanent conflict that seems to exist between the Court of Audit and the Commission. I agree with that. We understand that there are problems of political and financial control. The Committee gives the example that a decision whether to build public buildings is not based on cost, as it would be in any one of the Community countries and as it is in this country. As we are dealing


with a number of different countries there are political arguments over where that building should be. We have similar problems, but the political realities are on the basis of a rather wider agreement than is possible in the Community.
The Public Accounts Committee and the auditors say that they hope that they can eventually reduce the size of the annual report. I shall believe that when I see it. I hope so, too.
I shall now deal with some of the detailed aspects of the report, which, given the size of it, is quite well put together, and it is relatively easy to look at some of the major aspects of where things have gone wrong. The most serious criticism made by the Court of Auditors is in paragraph 2.4. When looking at the method of controlling the accounts it says:
A basic means of control is the regular reconciliation of the bank balances in the general accounts with the bank statements.
We all know that is so. The same thing happens in any small organisation in our constituency. It sends to the bank for its statement and tries to reconcile it with the actual cash distribution. In the case of some of the Commission's bank accounts, which were held in the national currency, the reconciliations were made only at irregular intervals.
The report continues:
For example, at 30 April 1981, the reconciliations of 31 December 1980 were still not finalised in the case of several bank accounts, two of which showed balances of 30·7 and 8·7 MEUA respectively. In the case of accounts held in the EUA no reconciliations have been made at all.
That is unacceptable. I have read the arguments of the Commission, which is enabled by the processes that it has to give contradictory views, in the latter half of the document, but I am still of the opinion that there is no real defence to such a practice.
If one looks at paragraph 2.6, one sees that there are two methods of holding the account. One is based on the computer, which is presumably an adequate method, but it seems to be somewhat slow and the information is difficult to extract. In addition to the accounts on the computer, there is a parallel system of accounts held manually which are used for the day-to-day basis of accounting. It is absurd to have two parallel methods, and I hope that that will come to an end.
If one looks at paragraph 2.8, one sees that, as is the normal practice in all these matters when the auditors move into an area, they look for outside confirmation. That is their task, duty and obligation, and it is a procedure that is widely used in modern accounting practice. It consists of having the account holder ask the banker to send direct to the auditor certain information on the operation and the balances of the accounts that are with the bank.
While the Department at the European Parliament accepted that procedure immediately—which is, after all standard practice—the Commission found it unacceptable that financial information could be sent to the Court of Auditors. It insisted upon acting as a post office. All communication between the bank and the Court of Auditors had to be made through the Commission. That is manifest nonsense and is disgraceful in a number of areas.
Whereas the Court intended to employ a modern, effective method of audit such as is widely used in both the public and private sector, the banks were not asked by the Commission for all the information that the court had requested. As is mentioned in paragraph 2.9(c), the bank

accounts of the external delegations and information offices, the bank accounts reserved for borrowings and loans, and the Treasury accounts of member States were not available and the court was unable to fulfil its audit objective in relation to the cash accounts at 31 December 1980. There are a number of firms which would find themselves in great trouble if they attempted to operate a system remotely like that which impeded the work of the auditors. That is something that we must look at and disagree with most strongly. I hope that the Minister will make that point to the Commission and end that disruptive method of interfering with the audit operation.

Mr. John Roper: Is it not the case that part of the problem is that there are different practices in different member States? In Belgium and Luxembourg it is not the custom for auditors to have direct access to bank accounts. Will the right hon. Gentleman tell us whether the multinational companies that have operations in Belgium and Luxembourg have found a way by which their auditors can have direct access to bank accounts? If firms have done that, it is an important lead, which the Court of Audit can follow.

Mr. Sheldon: Private money and its operation is one matter, but when we are dealing with public money and its disbursement, if the laws of the particular member State prevent us from being sure that public money is being used for the public good it is up to us to ensure that changes are made in its legislation. It will take a little time, and I understand the problems.
I continue with paragraph 2.28:
The continuing weaknesses in the accounting systems, already emphasised in previous years and its findings for the financial year 1980, together with the obstacle met by the Court in its audit of the cash accounts, mean that again the Court of Auditors has not been able to satisfy itself that the consolidated balance sheet as at 31 December 1980 adequately reflects the Communities' assets and liabilities at that date.
If a public company had to qualify its accounts in any way remotely like that, the shares would plummet immediately. That is the measure of the failure to allow the auditors the means by which they are empowered to obtain the information that they require.
Under paragraph 6.8, we see that in a number of cases expenditure was higher than the appropriations. Table 6.4 shows that under one budget heading 4½ million units of account were overcommitted, under budget heading 5011 the figure is 0·8 million units of account and under heading 511 it is 0·5 million units of account. Those substantial sums of money were spent in excess of the appropriations.
We all know the complications that arise from variations in the European units of account in respect of national currencies. Part of the overspending is due to that. However, there must be better control of the expenditure so that when money is appropriated the expenditure is kept in check.

Mr. Tim Rathbone: Will the right hon. Gentleman remind the House, from his experience at the Treasury, of the extent of his Government's over-expenditure in their last complete fiscal year?

Mr. Sheldon: The hon. Gentleman seems to have missed the point. We are talking not about Supplementary Estimates, but about appropriations and expenditure in excess of appropriations. That money should not have been there. If money is not there, it cannot be spent. We have a problem of virement, which is one of our


difficulties. However, over the years we have been able to satisfy ourselves on that. This matter is different and much more basic and we cannot allow that lax form of control to continue.
I come to some smaller points that are easier to understand and are more comprehensible because of their smallness. First, I refer to the number of days given as public holidays to Members of the European Parliament. That is something that we can all understand. One does not need great expertise to understand it.
Paragraph 10.32 states:
According to Article 61 of the Staff Regulations, a list of public holidays is drawn up by agreement between the institutions. The implementing measures for this provision give a list of days which are considered public holidays and days which may be considered public holidays. It also allows an institution, by special decision, to derogate from these rules. The whole of this legislation is designed to ensure observance of the principle of equal treatment of officials of the Communities, whatever the institution to which they belong. Accordingly, each year the heads of administration, following the consultation procedure … draw up a list. Thus, for 1980, the heads of administration agreed on a list comprising 18 days of public holidays.
An enquiry into the number of public holidays actually granted in 1980 showed that the maximum of 18 days had been respected in all the institutions except the European Parliament. The officials of this institution received 21 days' public holiday. The grant of three additional days of public holiday is contrary to the idea of equal treatment".
The cost of Euro MPs giving themselves holidays was about £500,000.
The next matter is a little more serious, although I do not deny the seriousness of the first. It concerns the receipt of allowance for motor car expenses by those who are already in receipt of such expenditure elsewhere. Paragraph 10.36 states:
A survey was carried out in Brussels at the Commission and the Council to see if there were cases of receipt of these allowances and use of official cars at the same time.
Those people had the benefit of the allowance as well as the use of official cars.
The report continues:
This survey revealed that:
(a) at the Commission, out of the 1,037 recorded journeys of official cars from the pool in June 1980, 222, i.e. 21.42 per cent., involved persons in receipt of the allowance;
(b) at the Council, out of the 153 journeys…46·5 per cent. Were reserved for the transport of officials in receipt of the allowance.
The Court of Auditors is strongly of the view that all institutions should take the necessary steps to ensure that any request by a person in receipt of the travel allowance for an official car for travel within the town where he is employed is refused. The Court requests the Commission and the Council to put an end to this abuse as quickly as possible.
That is a matter that we can all understand. I take it that there is no question but that that decision will be implemented immediately. There cannot be any quarrel with either of those two recommendations, which are simple and clear and which must be carried out to assure us of the basic competence of our institutions to look after public money.
The paragraph referring to typing pools reads like something out of Beachcomber. The pages per typist employed in the European Parliament amount to only about seven a day, but in the European Court of Justice the total is 15 a day. It is not immediately apparent why there is that enormous variation in the work load. That is not such a serious matter as some of the others, but, like many

of the other questions, it demands an answer. I hope that the Financial Secretary will ensure that an answer is obtained.
In paragraph 12.6 there is a reference to the failure to obtain information from Euratom about its accounts. That is serious. Anyone in receipt of public money must have an obligation to prepare and present all the figures required by the Court of Auditors. I hope that the Financial Secretary will also press that point.
There is one arcane matter which perhaps I should not deal with at great length, although I might have a word with the Financial Secretary on a subsequent occasion. It concerns the laxity of the system of provisional twelfths. That is the means by which the money is obtained to carry on expenditure, which is topped up month by month. That is a serious deficiency, which the Financial Secretary should investigate with care.

Mr. Julius Silverman: When the Parliament turns down the budget.

Mr. Sheldon: That is also a possibility.
Finally, I comment on the state of warfare between the Commission and the Court of Auditors. There is a big difference between the cash balances that it accepts and which the Court of Auditors says ought to exist.
Although I understand the point made by the hon. Member for Farnworth (Mr. Roper) about the laws of banking confidentiality in both Belgium and Luxembourg, I am sure that if there is sufficient will it will be possible to get the bank, with the agreement of the Commission, to present those figures. This is nothing more than a subterfuge, which is preventing the Court of Auditors from obtaining the information that it needs to undertake the important work that it must do.
We have a long way to go before we discover a proper system of control that we would accept as reasonable and that the House would find acceptable. The standards of financial integrity and judgment are a long way from being harmonised. I do not say that Britain has the best record in this respect, but we have a record of considering it to be important and we ought to bring that to bear. We have a long way to go and it is up to Her Majesty's Government to support all efforts to obtain the sort of control that we would consider acceptable.

Mr. Tom Normanton: First, I express my strongest support for the inclusion on the Order Paper today of this item. I am even more pleased to see that it stands in the name of my right hon. Friend the Prime Minister and members of the Government and that it includes the words:
and supports the Government in seeking to ensure the sound management of Community finance.
If that does not commend itself to both sides of the House, some hon. Members will give up hope.
We are creating in the European Community what I hope will be proven in the short-term that our actions are a major step towards achieving the more efficient and cost-effective management of public moneys in an appropriate manner. I must confess that I applaud what the right hon. Member for Heywood and Royton (Mr. Barnett) has been saying in debates, in Committees of this House, on the radio and on television, that we are doing that in this House in a most ineffective manner.
We firmly believe in this House that we control the public purse. I have no hesitation in saying that that is a


complete myth, by comparison with the means now at the disposal of the European Community, to do precisely that operation for which parliamentarians from all 10 countries were elected in 1979. I say "1979" because this House should be conscious and proud of the contribution which Westminster Members, over many years before that date, made to establishing the introduction of this system and new development and the taking of control over public expenditure.
We are talking tonight about a spending budget and we shall debate a revenue—raising Budget in the House on Tuesday. With great respect to both sides of the House, there is a great difficulty in using the word "budget". This House has a different interpretation of that word from that held by the European Parliament and Community.
This debate relates to the Court of Auditors which has only had time to produce four reports. In reality, all the preceding reports, to all practical intents and purposes, were dry runs. However, right hon. and hon. Members, while serving in this House and the European Parliament, made enormous efforts to introduce this as a method of monitoring and influencing the pattern, method and control over public spending and the House should be rightly and justly proud of that. I regard the Court of Auditors as a real Expenditure Committee.
The Financial Secretary to the Treasury referred to the Council of Ministers and the European Parliament. However, this Parliament would be ill advised to ignore the way and extent in which the European parliamentarians have worked out, in the years before the Court of Auditors started operating, methods, techniques, structures and procedures for carrying out this important function. I would particularly refer to three or four former colleagues. The late Sir Peter Kirk would command widespread European commendation for his part. My hon. Friend the Member for Scarborough (Mr. Shaw) also rightly shares in the public recognition, on a European basis, for the contribution which he made. Many others have contributed on the basis of what they see as good in this Parliament, but which could and must be made even better in Europe.
The procedures and the methods of working, or what I would call, to use the jargon, the "competencies" of the Court of Auditors, the budget control committee of the European Parliament and the budget committee itself, which is concerned with making up the budget and not examining it after the event, are only the start, but an extremely promising start, along a long road. Even before the report of the Court of Auditors was issued and, indeed, for the previous year or two, the European Parliament had been chalking up a number of significant achievements.
I declare an interest as a member of the European Parliament ever since Britain joined the Community. First, the European Parliament established its authority as absolute in fact and in reality and not simply because it was written into the Treaty of Rome. The methods by which the Court of Auditors was evolved have given to the elected parliamentarians an authority which in effect can be described as absolute. That power is contained in the discharge. The discharge is not a formality. In 1980, it was not regarded as a formality by the Court of Auditors itself, by the Commission, by the Council of Ministers or by the Parliament.
The discharge is analogous to the auditors' certificate of a public company. If one cannot get the certificate of clearance from one's auditors, one has to look out. Hon.

Members fall far short of reaching that state of accountability, scrutiny and control over public spending in broad terms, let alone in detail. Secondly, it is a conditional discharge on a firm commitment given by the Commissioners collectively and by the Commissioners individually, given to the Parliament publicly and given by Commissioners individually to the individual "spending committees". I use the word "spending" advisedly because they are, in practice, spending committees of the European Parliament. I am vice-chairman of the energy and research committee. That is a spending committee by whatever means one cares to interpret the word.
Commissioner Davignon spent tens of hours discussing with us, analysing the report of the Court of Auditors, and analysing also the report of one of our colleagues in the committee. I refer to Mr. Edward Kellett-Bowman and his intensive investigations as a member of the budgetary control team. That analysis was just as crucial, discriminating and critical as would be that of the auditor examining the spending, authority, and performance of the spending of the budgeted sums that had been allocated in any private or public company.
This resulted in firm commitments being given by the Commission during 1981 not simply to correct the losses, disappearance, or unaccountability of cash but, more important, to react to the recommendations of the committee for reorganising or restructuring the system, including the reorganisation of the staff of the Commission itself and their distribution of funds. I refer in particular to the Joint Research Centre at ISPRA where large sums of money from the public of Britain go each year. It is money for which we, as a Committee, feel we have a political and actual responsibility for monitoring.
I need hardly say that some of the findings of my fellow Member of the European Parliament, Mr. Kellet-Bowman—they are firmly on the record—were, to say the least, hair raising. Some of the points brought out in this report could be, by normal standards, interpreted as such. That must be regarded—

Mr. Richard Body: Of the hair-raising examples that my hon. Friend might quote, does he agree that a place might be found for what the Court of Auditors said in its annual report of 1978, and repeated in its report of 1979 about the way Members of the European Parliament were allowing themselves subsistence allowances in excess of those laid down in the regulations? Was that a good example for the European Parliament to set? Can my hon. Friend tell us whether it has now been put right, after the Government have criticised the European Parliament in two successive years?

Mr. Normanton: I am not disturbed by my hon. Friend's intervention but I cannot tell him directly whether the individual point that he raised, and which is referred to here, has been corrected. That is for the simple reason—I hope he will accept this not as an explanation but as a statement—that spending committees and their members in the European Parliament concentrate on those sections for which they are specially responsible. The one interest in which I am involved, and from which I shall make my comments from first-hand experience, relate to energy and research. There are many pieces of evidence in this report that demonstrate the serious defects,


omissions and shortcomings in Community expenditure on that subject, but I assure my hon. Friend and the House that those faults that have been pointed out in this report have already been corrected and dealt with or are in the course of being corrected. On my hon. Friend's particular point, I cannot give an authoritative answer.

Mr. Body: These are the subsistence allowances given to the Members of the European Parliament for which they are responsible and which they must know about. They are in excess of the regulations and in conflict, as has been pointed out by the Court of Auditors, between the money that the Members of the European Parliament collect for themselves and what should be paid under staff regulations. They have been told in both 1978 and 1979 that this is unfair because it conflicts with the principle that there should be equal treatment in the matter of subsistence allowance rights. Surely this is something that could have been put right if it had been alleged as long ago as 1978?

Mr. Normanton: In the often used words, I shall take note of the question that my hon. Friend puts and perhaps in another way and at another time I shall make sure that he gets the official answer on that point.
I am deeply glad that my hon. Friend the Member for Holland with Boston (Mr. Body) raised his point because this is precisely the kind of occasion when we should take an intelligent interest and concern in Community public expenditure and do so by putting questions, on this occasion no doubt to the Financial Secretary, but also direct to the elected representatives in the European Parliament as well.

Mr. Tony Marlow: I am glad that my hon. Friend has taken up the point of my hon. Friend the Member for Holland with Boston (Mr. Body) as a White Paper shows that every European Member costs £¼ million. That is a fantastic amount, and doubly reinforces the point made by my hon. Friend the Member for Holland with Boston and I am grateful to him for raising it.

Mr. Normanton: I am not sure whether my hon. Friend will be quite as grateful when I come to the end of my speech—I hope that the House will be patient. My main contention and contribution to the debate lies in the fact that we deceive ourselves, as effective parliamentarians, into believing that we know what is being spent, that we have control over the expenditure and that we, in detail, make the decisions as a Parliament in the detailed policies for spending. We do not. It is a myth. On the contrary, that is not the case in the European Parliament.
An important point can be made on the discussions between Commissioners and the spending committees of the European Parliament. This point is illustrated in the comments I shall make about Commissioner Davignon, having had many hours of discussion with him. He not only noted the criticisms in the Court of Auditor's report, but refused to pay lip service to them. He set about implementing, in an organisational sense, the recommendations of the energy and research committee, and the budgetary control committee of the Parliament. These are already in hand. He did that in a highly commendable manner. First, the report was discussed. Many weeks later, after lengthy discussions in the committee and with his

officials, he announced to the committee the structural, organisational, financial and policy control mechanisms that he intended to introduce as a result of the report. He spent the best part of one day outlining them himself.
Next, he appointed two new director-generals. One was from Whitehall, Mr. Christopher Audland, who was put in charge of the energy directorate of the Commission. The other was a new director-general for research, Professor Fasella. They each gave presentations to the energy and research committee of their responsibilities, their new divisions of responsibility and their remits. They invited contributions from each of the heads of division on how they would carry out their responsibilities and report back to the European Parliament committee concerned.
In that process of exchange and close collaboration in these committees lies the best prospect of achieving more effective control over expenditure and, more important, over the policies on which the money is spent. The two processes are linked together—a quarterly report on progress to the Committee brought immediate reactions and criticisms by elected parliamentarians. Very few hon. Members, when they reflect on that, would cavil at that sort of control over public policies and expenditure.
My main aim is to highlight this unique development on parliamentary control over the Executive. The House deceives itself grievously if it believes it has such a control. I doubt whether it ever has had, but the sooner the House gains that control, the more satisfied will be the public about the working of Parliament.
As my hon. Friend the Financial Secretary said, it is crucial that where spending is remote—the Community is one stage removed from national Government expenditure—that spending should be seen to be under constant scrutiny. The policies to which spending relate must be seen to be controlled and under the influence of elected representatives. The means must always be available for the electorate, through its elected representatives, to challenge, question and expose.
There may be a temptation in this debate for one or two right hon. and hon. Members to see in the Court of Auditors' report nothing but defects, failures, and even scandals. That may be true, but I prefer them to be revealed than to be concealed. It is a salutary lesson that I hope that all right hon. and hon. Members will take on board.

Mr. Keith Best: My hon. Friend has raised an important issue. Much play has been made by my hon. Friend the Member for Holland with Boston (Mr. Body) about the Court of Auditors' report in 1978 and 1979 concerning the expense allowances of Members of the European Parliament. The matter was drawn to the attention of the European Parliament by the Court of Auditors' report. Is my hon. Friend satisfied that machinery exists in this House to draw attention to similar problems, or does he feel that what my hon. Friend the Member for Holland with Boston said endorses his argument that, because the matter was raised in the Court of Auditors' report and drawn to public attention, something can therefore be done about it?

Mr. Normanton: My hon. Friend, as a Member of this House, has said more effectively and tellingly what I as a Member of the European Parliament would not dare to say. Deep anxieties exist in the minds of the public that there is a vast and growing area of public expenditure of


which the public and even their elected representatives in this country have inadequate awareness and comprehension. If that includes the ways of working of this House and its right hon. and hon. Members, who am Ito refute my hon. Friend's hints or suggestions?

Mr. Julius Silverman: I shall not follow the hon. Member for Cheadle (Mr. Normanton) in discussing the merits or demerits of the European Parliament or European parliamentarians, nor their contribution to financial control. There is sufficient to discuss in the report. However, I am astonished to hear him say that the control of finance in the European Community is superior to that in this Parliament. Whatever the defects—and there are defects—in the control of finance in this Parliament, what the hon. Gentleman said flatly contradicts the auditors' report. I am obliged to say that there would be a riot if it were possible to make the sort of comments in relation to this House that the auditors' report makes about financial control in the Community. I am not quite sure whether the hon. Gentleman has read the report. I agree with him that it is a good thing that the details of the report should be published. Unfortunately, that is not the attitude of the Commission.
Let us see what the Commission said, and what the Court of Auditors said in reply:
In its replies to the comments of the Court concerning the financial year 1979, the Commission expressed regret that the Court did not pay more attention to the Commission's efforts to improve implementation of the budget and too often restricted itself to criticism … The court evaluates the Commission's activities from a negative point of view rather than from a positive one, and in consequence finishes up with an assessment which does a disservice to Community integration.
That is an astonishing thing for a body such as the Commission to say about an independent organisation of the Community.
The Commission subsequently replied in a similar vein to a question by a Member of Parliament.
I assume that that means a European Member of Parliament.
In view of this it seems necessary to explain the Court's approach to its role.
The court approached its role, and pointed out its functions and duties, as set out in the report of the Committee of Public Accounts, Session 1981–82. The report states that the duties of the ECA are to examine the accounts of all revenue and expenditure of the Community, and
to verify that all revenue and expenditure has been received or incurred in a lawful and regular manner, and to assess whether the financial management has been sound.
That is all that the Court of Auditors has done in the matters that it has reported. It has done no more, no less.
If an accountant finds certain things wrong, he should disclose them fearlessly. He should say not "Some of your other accounts are all right; are you making efforts to correct the mistakes?", but "This is what is wrong." That is what the Court of Auditors is doing. The decision by the Community to appoint the Court of Auditors is a good one, and deserves credit.
The Committee, of which I have the honour to be Chairman, made a report on the first report of the Court of Auditors in relation to the accounts for 1978. The issue of obligatory expenditure was mentioned in that report. It said that a major part of the Community's expenditure,

largely the agricultural fund and other items, was obligatory and was expenditure about which neither the Commission, the Council, nor any other body had any option. The report stated that financial control of obligatory expenditure was a contradiction in terms. It also stated that in 1980, but the problem still exists. It is true that the agricultural part of the Community is somewhat smaller than it was, but the position is the same.
The Court of Auditors' report referred to frauds and irregularities. That problem exists today. It stated:
The Court notes that the Commission's statistics on fraud and irregularities are of limited significance and that staff of the Court were not allowed access to important files. On the other hand, the Commission contend that such files are not available for external scrutiny until the cases are closed.
That is an unfortunate state of affairs.
Similarly, in its report on the 1978 budget, the Commission referred to transfers between chapters. That is still going on. At virtually every meeting of the Committee of which I am chairman there are three or four items of transfers of chapters—money which was voted for one purpose and then transferred to another. Sometimes those are small matters. At other times they involve substantial sums. It is impossible to keep adequate control over how the money was voted and what it was used for. That happens practically every week.

Mr. Michael Shaw: The hon. Member for Birmingham, Erdington (Mr. Silverman) has not stressed one point. Transfers now, as distinct from the old days, are made known so that comments can be made by various authorities, including the valuable work of the hon. Gentleman's Committee.

Mr. Silverman: I am sure that is correct. There has been an improvement in that respect. However, the procedure makes it more difficult to chase the money—the revenue and the expenditure. The procedure still exists and there are still criticisms of the EDF and allegations of general slip-shod accountancy. The Commission states that less than half of the proposals that it made in 1979 concerning the 1978 budget have been attended to. That means that we are almost back where we started.
I shall now deal with my Committee's report. It states:
In regard to accounting matters … the Court identifies serious shortcomings in the internal control of the cash department of the Commission … It finds that the central accounts of the Commission do not include all the bark accounts.
The Minister has dealt with that to some extent. The report refers to useful transactions
whose results appear in the financial statements; the accounts department is unaware of the bank accounts reserved for borrowing and loans"—
that is one hand not knowing what the other is doing—
and of the accounts used by the external Commission delegations in the Mediterranean and ACP countries. As a result about a hundred bank accounts appear to escape the control of the Commission's accounting officer. The Commission replied to the Court that bank accounts reserved for their borrowing and lending operations were managed by the Directorate General of Credit and Investment; the relevant data were collated by the Commission's accounting officer before the financial statements were prepared. They said that bank accounts used by external Commission delegations are supervised by the European Association for Co-operation, whose accounts are audited by the Court of Auditors; they state that copies of other bank account statements are sent regularly to the Commission's accounting officer for supervisory purposes.
That is obviously inadequate and unsatisfactory. No accountant in Britain would accept that as a sufficient discharge of his duties.

Mr. Normanton: In the hon. Gentleman's capacity as Chairman of the Select Committee on European Legislation, will he give serious reconsideration to the vital need for documents of this sort to be considered alongside the documents prepared by the European Parliament's committees? One set of documents poses the questions and exposes the defects while the other answers them in a much more significant and meaningful form. I respectfully suggest that the hon. Gentleman's Committee may be an ideal body for bringing these two areas of reporting together.

Mr. Silverman: I agree with the hon. Gentleman about the importance of bringing the reports together. That is precisely what the Commission does not allow the Court of Auditors to do. It does not allow it access to the bank accounts, which it should have if it is to have effective and proper supervision of the Community's accounts. In that respect, I think that the hon. Gentleman is right. My Committee can only bring these shortcomings to the attention of the House. It is the watchdog and servant of the House—no more, no less.
It is claimed that supervision can be exercised by the accounting officer over accounts that do not appear in the general balance sheet. Surely that is a contradiction in terms. The court expresses the opinion that
the end-of-year presentation of assets and liabilities is not comprehensive and does not meet the statutory requirements … Despite some improvement in the form and presentation of the consolidated financial statement, the Court has not been able to satisfy itself that the balance sheet of the Communities as at 31 December 1980 adequately reflects the Community's assets and liabilities at that date.
The count concludes that much remains to be done in organisation and accounting management before reliable financial information will be available.
In reply, the Commission comments in a conciliatory fashion, pointing out that the number of improvements would entail employment of more staff and that the extension of the existing dialogue between itself and the court could make for a more productive relationship.
In addition, there is an account of what might be called a fraud relating to the traffic in rice which arises from the various operation of exchange rates. There are also some comments concerning regional development, with which it has dealt before.
Comment is made on the way in which the regional funds are operated. Perhaps in that respect the report is being a little unfair, because regional funds are operated by individual nations. They decide—as do this Government—where the regional funds should go. On the other hand, there is clearly inadequate supervision by the institutions of the Community. We do not have time to go through all that. A good many of those matters have already been related. In total, they undoubtedly constitute a great indictment of the way accounts are being kept at present, and that is bound to create a good deal of alarm inside and outside the Community.
The Government, in their motion, say that they should be supported in what they are doing to improve the situation. I hope that, in reply, the Minister will say exactly what the Government are doing to improve the situation and what concrete proposals they are bringing before the Commission and the Community to put its house in order as regards the control of expenditure. That is basically the theme of my address as Chairman of the Committee.

Mr. Michael Shaw: I am grateful to the hon. Member for Birmingham, Erdington (Mr. Silverman) for what he said. It did not surprise me, because it was what we would have expected from the Chairman of the European Legislation &c. Committee. I agree with his remarks about the duties of the Court of Auditors. He is right. The Court of Auditors is exactly what it says it is. It is an auditor in the commercial sense of the term.
My hon. Friend the Member for Cheadle (Mr. Normanton) said that if a clear certificate cannot be obtained from the auditors one must look out. In fact, many companies do not get clear certificates from their auditors. Of course, they do look out. They know that they have to justify what their auditors do not approve of. It is not action by the Court of Auditors that is required after it has reported, but the action of others. We should ask what steps the Council and indeed the Parliament—because they are the joint budgetary authority—are taking as a result of the strictures and comments in the auditors' reports. That seems to be the way ahead.
This is the fourth annual report from the court. It has rightly been said that the court is growing in stature and expertise and is building up a peculiarly skilled force for its unique task. No other organisation has to cover such a wide field in so many languages. Much of the expenditure and revenue-earning is dealt with by national systems rather than by its own international system. The situation is complicated, and it is bound to take time before the best system can be worked out and before the staff are skilled in handling all the problems that face them.
We should not neglect another matter. The draft change in the treaty was drawn up in 1975, but it was only in 1977 that the court came into being. Until then the Commission had had things very much its own way. That is not a criticism, but a statement of fact. It began from nothing and built up complicated systems, some of which involve putting work on to the various States for implementation.
Over the years it was only natural that such a growing organisation should feel that it often knew best and that its methods were the best. Therefore, when the Court of Auditors came into being differences of opinion were bound to arise. The conflict is not as great as hon. Members have depicted. From time to time there has undoubtedly been conflict, but that is healthy. Those who know anything about commerce will know that auditors and firms have fairly big tussles from time to time. That is healthy and will always go on.
Nevertheless, I hope that the discussions between the Commission and the court will ultimately lead to increased respect for each other and to improvements in the various systems. In other words, I hope that in the long run they will act for their mutual benefit, but not in collusion. The first lesson is that the Commission and the court must learn to work together. The second lesson is that the Council and Parliament must learn to work together. Both of those lessons are clearly stated in the fourth report. I shall not go into the details, but will stick to the principles involved.
The Council and the Parliament are the joint budgetary authority. One way or another, they must agree the budget between them. One way or another they give the discharge, although the final discharge is given by the Parliament. Therefore, they must jolly well agree. They must agree for practical reasons, and for one other. We must persevere with the Common Market and build it up


in accordance with the hopes of those of us who have spent much of our time working for it. Therefore, we must show those within the Community and in the rest of the world that the Parliament and the Council are capable of working together.
The greatest evidence for that must come from the work of the joint budgetary authority. I was sad that the 1982 budget was not agreed by the Council and Parliament at the correct time. The genuine hard work put in by the Minister and by other hon. Members, who have worked closely together, should have been crowned by an agreed budget at the appropriate time, last December. There was a difference about interpretation, and that difference must be resolved, but I do not see why the budget should have been held up.
Every year under the new system there has been disagreement within the budgetary authority. I do not wish to sound vainglorious, but I was the Rapporteur for the 1978 budget, and I made it my clear objective to see that there was agreement in that first year of the new system. I believed that it could be shown that we could work together thereafter and that there was a future in the organisation.
I am sorry to say that, for one reason or another, we have had disagreements, fallings out, delays in implementation and all the rest of it. All those points are brought out clearly in the document. Such disagreement cannot be good either for the efficient working of the one-twelfth system or for the reputation of the Common Market.
Those are the two general lessons to be drawn. One or two practical matters should also be examined. I have mentioned the first. We have seen the report by the Court of Auditors and we have heard the criticisms. We have not yet heard how the Parliament and the Council will deal with those criticisms. That is an important matter.
Secondly, if we are to have such scrutiny, and if the budgetary control committee is to work—it is now doing useful work, and I am glad to have been there at the start—there must be some discipline within the Parliament. As a Member of the Public Accounts Committee, I know that if we go into secret session and I break the codes by disclosing outside the Committee confidential information given to it before it has reported, I shall rightly be in trouble. No such discipline applies in the European Parliament.
We cannot justify pressure being brought to bear on people to give confidential information to a committee of that type unless we have some disciplinary hold over our own members. As my hon. Friend the Member for Cheadle has heard me say many times, one day the European Parliament must face the absence of such discipline and do something about it.
The report does not fill me with gloom. On the whole, I am filled with optimism, as it shows that the process is beginning to work. It is beginning to be effective and to bite. It will be appreciated as well as criticised by the Commission in the long run. The Council and the Parliament must now look to the consequences of the report by the Court of Auditors, which they themselves originally set up.

Mr. Teddy Taylor: I am astonished to hear my hon. Friend the Member for Scarborough (Mr.

Shaw) say that he is optimistic about the report. To my mind, it is a horrifying account of a scandalous and wasteful spending of public money.
There are many signs in the report that the Court of Auditors, rather than being optimistic, is fed up to the teeth and frustrated. It is denied the information that it requires and its advice is completely ignored or shoved aside into one of the many expensive pigeon holes in the European set-up.
What we have is an account of a great uncontrollable colossus which is both a scandalous gravy train and an appalling way to spend public money. Most upsetting is the way in which the court has tried to do the job of supervising public spending, but has been frustrated and, when it tries to point out what is happening, nothing is done.
My hon. Friend the Member for Cheadle (Mr. Normanton) was optimistic. He saw good signs. He said that the situation was improving and that things were happening. My hon. Friend the Member for Holland with Boston (Mr. Body) drew attention to the complaint in the 1978 and 1979 reports that the daily subsistence allowance rates of the European Parliament were considerably higher than those fixed in the regulation. Given all the great new ways of getting things done, my hon. Friend asked what had been done about that. My hon. Friend the Member for Cheadle, being a very courteous person, said that he would try to find out and let my hon. Friend know. He need not bother. I have read the reports in great detail, and the answer is in paragraph 10.15 of the 1980 report. The Court of Auditors says:
Although the Court of Auditors, in its 1978 and 1979 annual reports, criticised the scale of daily subsistence allowances used by the European Parliament, the rates applied still remain considerably higher than those fixed by the Council Regulation.
It then clearly states:
This is a contravention of both the Staff Regulations and the principle of equal treatment for Community officials.
A scandal was exposed in 1978, 1979 and 1980, which is against the regulations and against the court's principles Yet nothing has happened,. It is not a complicated question; such as how to reorganise the common agricultural policy, but a simple matter of cash paid to MEPs. Yet, three years later, nothing at all has happened. How can anyone honestly be optimistic about anything else when, in the only case raised—and a very simple one—nothing has happened, although it was stated to be a contravention of the regulations?
The frustration of the court has been referred to briefly, in that it has had difficulty in obtaining details of bank accounts showing the money that is in the Common Market. That money is paid by all of us, but the court cannot get the information.
With regard to fraud, I urge hon. Members who have not read the report to read paragraph 4.36, which states:
Public opinion finds it difficult to accept the existence of frauds and irregularities … The announcement by the press at regular intervals of spectacular frauds adds to the doubts expressed as to the sound financial management of the common agricultural policy …
However, the Commission has refused to communicate to the Court all relevant information on cases of fraud or irregularity that are not yet closed …
In practice the Court has not been able to satisfy itself that the Commission acted with diligence in certain spectacular cases of fraud, which were often exposed by the press without having been earlier declared in accordance with the procedure in … the Regulation".
We know that the court cannot obtain the information that it requires about bank accounts. It cannot even get the information that it demands about fraud, and, in its view, the Commission's attention to the matter is absolutely appalling.
I see no evidence of hope. All that we see is this gigantic colossus spending our money like water—and spending more all the time. Although we are lucky to have the report of the Court of Auditors to spotlight some of the scandals, again it is ineffective and nothing is done.
In paragraph 10.6, relating to the preparation of payrolls-the cash paid to people who work in the Commission—the court says:
The persons who are empowered to authorize changes in the personal information upon which payment of salary is based … do not regularly ensure, alone or by delegating this responsibility, that all their decisions… have been correctly applied by the salaries department.
It also says:
Existing decisions are not always re-examined to see whether the conditions which were present at the time of the decision still obtain. This is the case, in particular, in respect of the fixed secretarial allowance.
There is also the most appalling indication of how the money is spent by the Community in its various programmes. I hope hon. Members will take time to look at paragraph 14.40, which mentions a preliminary study for a hospital in Benin. The technical staff of the Commission protested at the casual way in which the consultants' carried out their work, yet these consultants were still entrusted with detailed technical work. As a result, the contractor was obliged to redraft all his plans. The contractor has since gone into liquidation and the building of the hospital, which should have been completed in August 1979, was at a standstill when the court went out to see it in 1981.
We also had a report in paragraph 14.46 of splendid food production units which were meant to do very well but which could not work because a small section of the road that was required had not been built.

Mr. Normanton: My hon. Friend referred to the scandal of money being wasted on the hospital concerned. Was he talking about a hospital on the Continent, or public buildings in this country where such things, or even worse, have happened, or are still happening, and the House still has no access to inside information about them? I hope he will bear that point in mind in his contribution.

Mr. Taylor: I am not saying that no Government or public authority wastes money. Of course they do. Our experience as Members of Parliament is that local authorities and Governments tend to waste money, but, under the rigid eye of the Treasury, at present it is more difficult to do so.
What I mean by my example was that when these things are pointed out, unlike this country where steps are taken, nothing appears to happen and things get worse. The court complains of the number of missions by the Parliament, and it is planning more. It is all there in the report.
We also have a scandalous attitude to the use of public money. All public representatives should accept that the money entrusted to them by the people should be looked at more carefully than their own. I wish that those who are interested in these things, and our friends in the Treasury, would look at the example given in paragraph 11.7 of an astonishing fitness centre on the Commission's premises, supplied free and open only during working hours,

complete with swimming pool, gymnasia, saunas and all the technical installations and service rooms. We have already heard about the typists, who have this massive output of seven pages per day. I wonder what our own private secretaries would say if they were to have some kind of incentive system applied on that basis.
I hope the Government will look, in particular, at this further appalling revelation about the organisation known as the European Movement, which, until recently, was sending out public appeals to the effect that it received no support from public funds. I hope that the Financial Secretary will look at paragraph 12.27, in particular, where we have another account of the European Movement. He will be aware that I have recently asked questions in the House about the activities of its subsidiary—European Movement Investments. Companies incur all sorts of trouble in Britain for not submitting accounts, but this organisation has not submitted accounts in this country for 1978 and 1979.
We read that the European Movement, which receives about half of its income from the European Commission, was found not to have adequate internal control arrangements.
Nor had it ever been subject to external audit. Its failure to provide accounts to the Commission should have alerted the Commission.
I should like to ask those of my hon. Friends who describe themselves as optimistic how an organisation that has never had its accounts audited can get hundreds of thousands of pounds over a period from the Commission. Why did our Government give £30,000 last year to the European Movement, which has not had its accounts subject to external audit or even had them published? It is an appalling situation and, like my hon. Friend the Member for Scarborough, I should like to know what is going to happen about it. Surely something must happen.

Mr. Marlow: There has been a great deal of publicity today about research assistants in the House offering their services free. Is it not possible that some of them are being financed by the European Movement? We would not know about it if they were. If they were here, would they not be propagating certain views about the European Community which were not in the interests of the United Kingdom or the British Government?

Mr. Taylor: I understand that the movement believes in a federal Europe. I know that the Government have said that they do not want that, but they are still giving it money. I am sure that my hon. Friend the Financial Secretary, who is a wise and prudent man, will, having heard this astonishing, scandalous story about the so-called European Movement, do something about it and make sure that if the European people cannot stop taxpayers' money pouring into it at least our Government will. I hope that there will be a public inquiry into the activities of the organisation, which appears to act in a more appalling way than some of the banks and companies which have been scandalously publicly attacked in this country. Something must be done about that scandal.
A whole number of such matters is quoted. I accept that it might be worth while if we could say "The scandals have been revealed and something will happen about them". The sad thing is that I do not know who will do something about them. Our splendid Treasury team can do nothing


about them. There is not the slightest indication that those involved in the Common Market at any level are doing anything about them.
When we receive the reports, questions are asked. o Things come up time and again. When the poor old court, which seems to consist of decent, clever people, tries to get on with its job, it is denied information. How can we ensure that the court sees the bank accounts that it wants to see? How can we ensure that it has access to the papers on frauds and irregularities which it is not allowed to see? Whose job is it? Who can tell us?
The sad fact is that nobody seems able to control anything. Money is spent like water. No one seems to want to know what the others are doing. I should like something to be done about it. I do not think that that will happen through having more European Parliament committees and more delegations going to Brazil and Tokyo to see what is happening there.
The court seems to consist of a good crowd of people. Could we not get them to do a thorough efficiency probe of the set-up? What they can do now is to look at the accounts On the basis of the policies agreed. For example, if the European Parliament says "We are going on a trip to Brazil and we are taking 400 interpreters", the court can ask "Are 400 needed?" If the Parliament decides to organise a reception and spend £10,000 on a big meal, the court can say "You should have gone not to that contractor but to the other". It cannot dictate the policy or the structure.
Is there any way in which the Government can get the court or any other body to look at the whole structure of the EEC and ask "How can we make this work more efficiently, so that cash is spent more prudently?". For example, there is the basic question whether we need the so-called European Parliament at all. I accept that there are some very good people in it. My hon. Friend the Member for Cheadle is a very good chap. He does much good work here, and I am sure that he works hard wherever he goes. But if the European Parliament disappeared tomorrow, if it closed its doors and nothing more happened, who would notice? An enormous amount of money would be saved.
I do not want to be unkind, and I do not want to be insulting to any of my hon. Friends, but I think that by and large the calibre of Member in the European Parliament is probably slightly higher than the calibre here. However, as far as I can see, there is not a great job to be done.
My hon. Friend may say "You are wrong. It is a great thing, and it does a lot of good work." He has his views and I have mine. People may think that both of us are slightly biased. I do not want my hon. Friend to do it, and I do not want to do it. I should like the court to look at the Parliament and ask "Do we need this at all?"
I should also like the court to look at the Commission and ask "Does it need all the people and the departments that it has?" We need a great efficiency audit—a kind of Ian MacGregor stepping into the whole Common Market set-up and asking "How can we make this work efficiently and not waste taxpayers' money?"

Sir Anthony Meyer: My hon. Friend is having a lot of fun. No doubt what he says will arouse a great deal of enthusiasm. I think he should be a little more careful. Listening to "Any Questions" the other night, Patrick Moore had a great deal of applause when he said that the only person he would like to see come to the Palace of

Westminster was Guy Fawkes. I think he would get just as much applause for saying that the European Parliament should be blown up.

Mr. Taylor: I am not saying that we should bring Guy Fawkes into this. I am not saying that we should abolish the European Parliament. I am probably among those who are slightly critical of the European set-up. My hon. Friend is among those who, in my view, appear to be rather enthusiastic and overlook some of the obvious problems. To that extent, we are both a bit biased.
I should like to see the Court of Auditors, some top accountants, Ian MacGregor, or Michael Edwardes—a sensible man used to controlling money—look at the whole set-up. I want that done because I accept that we are in the Community. We have had a referendum and we are more and more enmeshed in it. I cannot understand why the Labour Party does not like it. It is all that it would want. It has all the things—such as organising agriculture, steel and employment on Socialist terms, with a grand plan and plenty of Eurocrats and inspectors to make sure that people do not produce too much, interfering with the market, and having big subsidies—that are pure Socialism. I cannot understand why the Labour Party is against it. Will it stop it applying Socialism? M. Mitterrand has shown that one can have everything that a British Socialist would want to achieve within the Common Market.
The Labour Party could have European employment plans, energy plans and organised protective tariff walls keeping everything out. It is pure George Brown, Michael Foot Socialism. It is there for the taking. What on earth is the Conservative Party doing supporting this set-up? What splendid work the Prime Minster does with her attempt to control spending, cut out inefficiency and allow the free play of market forces. Those are all things that the EEC works against. It is the nature of the organisation.
In those circumstances, as we are stuck with the thing and there is no lawful way of leaving, what we need is not people standing up saying that they are optimistic or pessimistic, but an organisation of clever people. I should like to see Ian MacGregor, Michael Edwardes, the Cowl of Auditors and others look at the whole structure and ask the simple questions "Do we need the European Parliament at all? Can we cut down the size of the Commission? Do we need more legislation?" Let us have efficiency. That is what the Court of Auditors was set up to do and is not being allowed to do. I say three cheers for this court if only it is given some scope. May we have a real, proper, efficient look by independent experts at the whole Common Market structure?

Mr. John Roper: I do not think that the House expected the hon. Member for Southend, East (Mr. Taylor) to be over-optimistic about the development of the Community, and we have not been surprised. To take up one of his later points, perhaps the European Community as it is developing is rather purer social democracy than it is Socialism. That is for others to judge, and not for me at this stage.
I do not wish to take up all the points that the hon. Gentleman made, although it is rather unfortunate that he ceased his reading of the important document at about page 164 and did not have time to read the replies that were prepared by the Community's various institutions, which answer a number of the specific points that he made.
It is not for me to get involved in too much detail about the way in which the European Parliament has treated its mission allowances. On page 205 the hon. Gentleman will find the European Parliament's reply to the criticisms made by the Court of Auditors. I accept that it is not a completely satisfactory reply, but it is a reply to which the hon. Gentleman should have drawn attention. He should not have said that there was no response, because the European Parliament has responded.
The hon. Gentleman made two points about the European development fund. We know from our experience with overseas aid projects that have been put forward by our Overseas Development Administration that often some of the money that is spent in that area is dealt with in an unsatisfactory way. The hon. Gentleman referred to paragraph 14.39 and subsequently to paragraph 14.45, dealing first with education and health projects and then with road projects.
It is important to put the hon. Gentleman's examples of things going wrong in the context of the report of the Court of Auditors. In paragraph 14.39 the court said:
As with agricultural projects the comparatively severe comments of the Court should not obscure the fact that two of the four hospitals and most of the educational projects are satisfactory as a whole.
One must not take the exceptions and say that everything is going wrong. The Court of Auditors said that that was not so.
Similarly with road projects, clearly things go wrong when one tries to build a road in the tropics. Paragraph 14.45, which the hon. Gentleman quoted, states:
The investments financed by the EDF which the Court has examined have been undeniably useful. Most of the projects have attained their initial objectives.
The report refers to three projects—among a large number—that have proved less useful than expected. They therefore represent a partial failure. It is worth looking at the response of the Commission to the court's report about the road projects, as it takes on board the criticisms that were made.
I was concerned about the criticisms of the Court of Auditors in the section of the report dealing with the lack of accounts of the European Movement, with which I was associated at one time. Therefore, I was relieved to turn to page 245 and read what is said there about that matter. It is important that paragraph 12.22 of the Commission's reply, on page 245, should also be quoted in the debate, in view of what the hon. Gentleman said. It states:
Balance sheets and reports from the European Movement for 1977, 1978 and 1979 were made avilable to representatives of the Court of Auditors at an inspection visit in February this year.
It is made clear that, although the report for 1980 is not yet available, an accountant's report for that year was sent to the Court of Auditors in June. It is important to give both sides of the story when we are considering these matters. Important criticisms should be made. Thank goodness we have a Court of Auditors that makes those criticisms.
It is also important that there is a dialogue between the Court of Auditors and the Community institutions and those bodies to whom the Commission makes grants. Although I am not satisfied with all that I read on page 245, the picture is a good deal more satisfactory than one would have been led to believe if one had just listened to the hon. Member for Southend, East.
We do not have as many debates on European matters as we did at one time. The hon. Member for Birmingham, Erdington (Mr. Silverman) and his Committee were right to bring the document to the attention of the House. I am glad that the business of the House has worked out in such a way that we are having the debate at a civilised hour, stretching over a longer period that has sometimes been the case in the past.
The document is important and is one that the House ought to debate and consider. I am sorry that not more Opposition Members who are frequent in their criticisms of the European Community are present to listen to the debate, to hear the arguments and to see what is being done to tackle some of the criticisms that they make about the European Community.
There are clearly many problems, and of course attention has rightly been drawn to them this evening. However, having served on the Select Committee on European Legislation &c. between 1974 and 1979, I can appreciate, from the fourth report of the Court of Auditors, the sort of progress made in recent years to get a satisfactory grip on the Community's affairs. It is not yet perfect—far from it—but it is progress along the right road. Whatever may be said by the hon. Member for Southend East, the role played by Members of this House when elected to the European Parliament is to ensure that there is an effective procedure for auditing and an effective ,. and public dialogue in these matters.
Although he is not here tonight, it would be fair to pay tribute to the hon. Member for Fife, Central (Mr. Hamilton), who, when a Member of the European Parliament, played an important part in trying to ensure that institutions were developed within it to carry out the process of auditing.
There are clearly many outstanding problems. However, is that surprising? This extraordinary experiment attempts to knit together the administration and accounting systems of 10 countries which have different ways of doing things. It is a complex arrangement and the countries have different standards, styles and—dare one say it?—different levels of efficiency within their administrations. It is a remarkable achievement to bring those countries together, and I hope that what has happened will be improved and that there will be a response to the recommendations in the Official Journal of the European Communities.
Before concluding I draw attention to perhaps one of the most useful parts of that journal, although no reference has so far been made to it. I refer to the second annex, pages 170 onwards, which gives perhaps the clearest account of the European Community's budget and sets out a series of diagrams. Page 184 shows the make-up of the Community's resources, contributions from different States, Customs duties, agricultural levies and so on.
The right hon. Member for Ashton-under-Lyne (Mr.Sheldon) is lucky enough to have a coloured version. The Vote Office was able to provide me only with a black and white copy, which is much less attractive. In either case, it gives an extremely informative account of the way in which the Community gets its money and clearly sets out the budget dilemmas, which we are not discussing tonight, but which the Community must come to terms with in the near future.
Although my right hon. and hon. Friends are firmly committed to continued British membership of the European Community—

Mr. Marlow: The hon. Gentleman referred to the commitment of his right hon. and hon. Friends and to the forthcoming discussions and negotiations about the Budget. Will he take this opportunity of telling the House whether, with regard to the Budget, he believes that the United Kingdom should be in broad balance, or where he would draw the line?

Mr. Roper: The hon. Gentleman tempts me to go further along a line which I know that you, Mr. Deputy Speaker, would rule out of order. We are not discussing the budget tonight, but the material in the journal sets out the facts and is of considerable value. Tonight we are discussing the Court of Auditors' report, and I am sure that before long the House will have useful opportunities to discuss the budget.
While my right hon. and hon. Friends strongly support continued and developing British membership of the European Community, we believe that it would be wrong to be complacent about the many unsatisfactory aspects of the Community. This document and the responses from Parliament, the Council and Commission represent an important point from which to start to tackle some of those problems.
As the Financial Secretary to the Treasury said, it is important that the Council and the United Kingdom Government, within the Council, should press for the full implementation of this report. It is important that the European Parliament, playing its role, should press as hard as possible for full implementation, even in those sectors where it may mean reorganising the work of the Parliament itself.
Those hon. Members who sit not only in this House but in the European Parliament should listen to what has been said in this debate about the defects within the Parliament to which the Court of Auditors has drawn attention and they should act to deal with those problems that are directly within their competence. I hope that the Government, in their half-yearly White Paper reporting to the House on the work of the Community, will consider including a section on how they see the report of the Court of Auditors being implemented within the institiutions of the Community. That would give the House a further opportunity to see whether the important recommendations in this document are being put into practice and for hon. Members to return to this discussion on a later occasion.

Mr. Richard Body: I agree with the hon. Member for Farnworth (Mr. Roper) that some progress has been made. I do not see, however, that a report every year from the Court of Auditors can be respected until the European Parliament itself behaves more responsibly over criticisms addressed to it. I have made this point before, but I must repeat it for the sake of my argument.
As long ago as 1978, the Court of Auditors criticised the European Parliament for taking upon itself allowances far in excess of those laid down. Members of the European Parliament are treated in a similar manner to hon. Members. They are given allowances substantially the same as those of senior civil servants. If we in this House were to take allowances in excess of what was laid down and in excess of what civil servants were receiving, there would be a hue and cry. We would be rightly condemned.
In 1978, the Court of Auditors rebuked the European Parliament for taking more money than it should have done for allowances while its members were away from home. Nothing was done about the matter. The European Parliament paid no attention.
In the following year, the annual report contained the same criticism. Again, the Parliament did nothing about it. Now we have the 1980 report. For the third time, criticism is made of the allowances of Members of the European Parliament which, I am told, amount to about ₤59 a day. What does the European Parliament say in its own defence? It had the opportunity of replying to the Court of Auditors. It is true that some comment was made about the cost of missions abroad—that is acceptable—but no reasonable account was given to explain why allowances were being exceeded.
I am glad that my hon. Friend the Member for Southampton, Test (Mr. Hill) is present. My hon. Friend can perhaps give some explanation. I do not know whether he was a Member of the European Parliament in 1978. I believe that he was. I do not know whether he can be persuaded to intervene. It would be helpful if he could recollect the Court of Auditors' criticism of the allowances to Members of the European Parliament in excess of those laid down in the regulations.
The Court of Auditors rebuked the European Parliament not only for being in breach of the regulations but also for behaving unfairly. It was taking more money than officials of standing in the Commission. The Parliament was therefore wrong on two counts, yet, to this day, the Parliament is unwilling to put its house in order. If the Parliament is to persist in paying itself allowances greater than those laid down in the regulations, it cannot be much respected. Worse, if the Parliament is to behave in this disgraceful manner, the Court of Auditors will not be treated with the respect that it should receive.

Mr. Tony Marlow: We are today debating the motion that we should take
note of the Annual Report from the Court of Auditors concerning the financial year 1980
and support
the Government in seeking to ensure the sound management of Community finance.
Hurrah for the second point, although I cannot say that I am very optimistic about it. With regard to the first point of the motion, we are supposed to be taking note of this document. One can hardly weigh the wretched thing, let alone take note of it. There are 260 pages of highly complex, cross-referenced text, largely, if not all, translated from the French into Civil Service English, that is difficult to follow, to understand or to make sense of.

Mr. James Hill: I would point out that the chairman of the Court of Auditors is the next inspector of taxes in the United Kingdom and there is no reason why anything should be written in French.

Mr. Marlow: I am grateful to my hon. Friend for his intervention. I thought for one happy moment that he would offer to translate the document so that I could understand it.
We are talking about a massive expenditure of about £8,000 million of public money, albeit on a European scale.

Sir Anthony Meyer: My hon. Friend alleged that the document is written incomprehensibly. Perhaps he would care to give us a sample passage of the incomprehensibility?

Mr. Marlow: All things come to those who wait. I have that in mind and I shall not disappoint my hon. Friend.
Some £8,000 million of public money, albeit European public money, has been raised from the taxpayers of several European countries. That sum of £8,000 million slips off the tongue quite readily. It is an immense amount of money. It is more money than would be required to provide this country with a modern, sophisticated nuclear defence system such as Trident, which even at the most exaggerated estimate would cost less than that sum. It therefore behoves us to ensure that the money has been well spent.
I think that my hon. Friend the Member for Southend, East (Mr. Taylor) referred to one of the things that must give one a great deal of cause for concern, and that is contained in paragraph 4.36 concerning frauds and irregularities, and difficulty of access to important files. It says:
Public opinion finds it difficult to accept the existence of frauds and irregularities in the management of the EAGGF, Guarantee Section. The announcement by the press at regular intervals of spectacular frauds"—
this is very regular intervals—
adds to the doubts expressed as to the sound financial management of the common agricultural policy"—
which gobbles up some three quarters of the money that is spent within the Community—
and naturally in such circumstances it is generally expected of the Court of Auditors that it will examine carefully the manner in which the Member States and the Commission fulfil their respective obligations under Regulations No. 283/72.
That is a cross-reference. Of course, it would be generally accepted that the Court of Auditors would wish carefully to examine the manner in which these things have taken place and the Commission fulfils its duties. However, the Commission has refused to communicate to the court the relevant information on all cases of fraud or irregularity. Why is that so? Is it because the Commission cannot, is it because it is embarrassing, is it because it does not want to? Surely this is something that the House would not tolerate. It is a sad day when a document such as this is brought to us to take note of when it is apparent that these frauds can take place, have taken place and are not effectively and efficiently dealt with by the Court of Auditors, who would properly wish to deal with these frauds. It is a savage and terrifying indictment of the way that the Community runs its affairs.
Where does the money come from, and where does it go to? On page 194 of the report we find the source of income. In particular, we find the VAT payments for 1980. The VAT payments which have found their way into the community coffers from the United Kingdom have been about two-thirds higher than those from the Republic of Italy. The gross national product, the population and the amount that is bought and sold in Italy is much the same as it is in the United Kingdom. So why do we pay two-thirds more in VAT? That is bad enough. In the White Paper which the Government have kindly produced today we find that the factor is much the same. So depite this discrepancy in 1980, no improvement has yet come about.
It does not matter who pays so long as the receipts are fairly equitable. So let us look at the receipts. If we look

at the guarantee part of the agriculture policy, we find that the United Kingdom received in 1980 nearly 900 million units of account. How much did the Irish Republic receive, with a population one-fifteenth that of the United Kingdom? The answer is 564 million units of account—two-thirds the amount, one-fifteenth of the population.
How much would one expect the Dutch, with a population one-fifth our size, to receive from the policy? Would it be 900 million units of account, as in the case of the United Kingdom? Let us be generous. No, it is 1,500 million units of account. These figures are devastating, and show how lopsided and unfair are the existing policies of the Community.
My right hon. Friend the Prime Minister and her right hon. Friends are currently in negotiation with the Community in an attempt to sort out these unfairnesses and to ensure that in future the situation is more equitable than it has been in the past. Still the likelihood is that this year we shall have to make a net commitment to the European Community of some £620 million—£12 a head for every man, woman, and child in the country. If we are to negotiate, the first thing that we must know is whether, looking at these figures and at future figures, we are negotiating from a position of strength.
This country provides a market for the agricultural surpluses of the European Community. Not only do we provide a market for them, but our housewives are force-fed those commodities at twice world market prices. We provide a massive market for the surplus of manufactured products from the European Community—so massive that, in the last two months of last year, we had almost as great a deficit in manufactured goods with the Community as in the whole year with with the Japanese.
If we are to negotiate with the Community, as we must, we are the givers and they, all along, are the takers. If we are to stand up and say "Look at 1980. Look at our Budget deficit for 1980; look at the way you spent our money in 1980; so far and no further; this coming year not one penny of net contribution to the Community Budget", what will they say? Will they say "No trade with the United Kingdom. We shall not sell you agricultural surpluses"? Never. They have the bargain, and we are paying for it.
The Conservative Party is the party of the United Kingdom, unlike the Social Democrat Party which goes toadying and crawling to Europe. We are the party of the United Kingdom. Let them be the party of Europe. As the party of the United Kingdom, let us go forward into battle to ensure that our Government and our people get a fair deal, for which we have been waiting far too long.

Sir Anthony Meyer: I waited with bated breath for the example that my hon. Friend was going to give of Franco-British gibberish, which he says is contained in the document that we are considering.

Mr. Marlow: I have read considerable texts from the document. I had hoped that my hon. Friend was listening, but apparently he was not.

Mr. James Hill: I shall not go into the pros and cons of whether the report is exposing the Community's weakness or strength. I wish to put on record special praise of a former Member of the European


Parliament with whom I served in 1973 and who is no longer with us in the House of Commons. Mr. Rafton Pounder was one of the Belfast Members and an auditor by profession. Rafton Pounder started the flow of decisions that led eventually to the establishment of the Court of Auditors, which is a worthwhile body. Having been proposed in 1973, and having been supported by me, it took five years or more before it became a part of the Community.
There was natural resistance by the Commission. There was resistance by the other institutions, because the Court of Auditors covered the European Investment Bank, the European Coal and Steel Community and other European institutions. Rafton Pounder, who I believe is prospering in Northern Ireland as the secretary of a building society—I hope that I have not given him too much prominence—was the thrusting force of the movement that recognised the need to scrutinise the Commission's expenditure. Surely none of us, whether pro or anti-Community, would deny that that was the right way to go.

Mr. Robert Sheldon: I am happy to join the hon. Gentleman in the tribute that he pays to the work of Rafton Pounder. I knew a bit about him, because I was his pair. I assumed that with a majority of the size that he had in Belfast I would remain his pair for many years. It was only the upheavals in Northern Ireland that denied the House the advantages of the work that he had done being continued for many years.

Mr. Hill: I thank the hon. Gentleman for that compliment. Rafton Pounder and I worked closely together. When I was appointed chairman of the Transport and Regional Policies Committee in Europe, Rafton was a member of the committee. We realised immediately—perhaps he was ahead of me in his recognition—that there were occasions when scrutiny would be needed of the vast expenditure of European units of account. He pressed for that scrutiny, and even after he was defeated at the polls he remained in Brussels to set up the first imaginative scrutiny of what would be needed to form a Court of Auditors.
The Select Committee on European Legislation &c. has visited the Court of Auditors in Luxembourg. We met Sir Norman Price and his colleagues and the Committee was assured that the scrutiny would be above board. The first report revealed many problems that the Community was facing. It revealed also vast expenditures on motorways and hospitals that were not needed, or on motorways that ended nowhere. There was a need perhaps to expose the warts and the boils. That is because in Europe they are invariably used by anti-Marketeers to denigrate the system rather than to identify the imperfections of auditing at its highest level.
I was chairman of the regional policy programme and from time to time we found that there were, perhaps, anomalies. In particular, the United Kingdom would not allow particular regions to apply directly to Brussels for regional development funds. That was a mistake, but it was carried through in the Council of Ministers. As a result, Scottish or Welsh councillors sometimes took deputations to Brussels for regional funds that we could not provide. Those funds must come through Government Departments. Therefore, it was impossible to short-circuit the Government.
There were many other anomalies, particularly in the common agricultural policy. I even agree with my two

colleagues, who are so anti-Common Market that it is usually impossible to do so. However, I agree that there are anomalies and loopholes. Pigs can be driven from the South of Ireland to the North and bought back the next day with a subsidy. The Court of Auditors was set up to prevent such anomalies.

Mr. Marlow: I have only a small point to make, but it is important. My hon. Friend referred to me and to my hon. Friend the Member for Southend, East (Mr. Taylor), who can no doubt speak for himself. He said that we were anti-EEC. I am certainly not anti-EEC and I do not think that my hon. Friend is either. We are pro the United Kingdom. That is an important difference that should be made when discussing these issues.

Mr. Hill: I apologise if I was mistaken. My hon. Friends have always given me the impression that they are anti-EEC, but if they are only pro the United Kingdom and not anti the other Nine, they hold a neutralist position. I shall honour them if that is the position that they hold.
It is difficult to be a neutralist in the Community. When I joined the Community there were only nine member States, but there are now 10. When going to Brussels, Strasbourg or anywhere else to attend a meeting, one must have faith and believe that it will do some good. The difference between my two hon. Friends and myself is that I believe that the Community is doing some good and that it is holding us together. In Europe there is a feeling that we are working as a family of nations. I am no longer a Member of the European Parliament, but I am a Member of the Council of Europe, which consists of 21 nations. I always feel that the free exchange of information benefits the Community. I should be only too pleased to accept the anti-Market view if someone could tell me how our debates could reach the 20 other countries or the nine other nations with the necessary impact.

Mr. Body: My hon. Friend said that anyone who went to the European Parliament had to have faith and soon. However, those who go there receive a daily subsistence allowance. Ever since 1978 people have been drawing the allowances that have, year after year, been criticised by the Court of Auditors, because they are in excess of the regulations. That may be some compensation for what they have to do, but how can it be justified?
Why does the European Parliament, year after year, cock a snook at the report of the Court of Auditors, which consistently rebukes Members of the European Parliament for drawing daily subsistence allowances that are substantially in excess of the regulations and of the amounts received by the officials who are meant to receive the same amount? Is it fair that Members of the European Parliament should take more than the officials, who are meant to have exactly the same as them?

Sir Anthony Meyer: My hon. Friend might care to point out to our hon. Friend the Member for Holland with Boston (Mr. Body) that he has perhaps not read the report as closely as he might, as this part of the report deals not with Members of the European Parliament, but with the staff, which is a different matter.

Mr. Hill: I do not wish to become involved with the petty cash of the organisation. It is like trying to dot the i's before we have written the word. I am here to defend not MEPs or allowances, but the Court of Auditors, the accuracy of its report and the necessity for its scrutiny, which I believe is first class.
Whatever the Court of Auditors wishes in this matter—if it wants more teeth, as my hon. Friend the Member for Southend, East (Mr. Taylor) suggested it does—it will come. As Europe evolves amd moves forward, the Court of Auditors will gain strength. This is only its second report. I believe that the Commission, taking cognisance of the report, will act accordingly and moderate whatever excesses my hon. Friends wish it to deal with. To me, the whole purpose of the Court of Auditors is to do away with the anomalies and to do away with any criticism of the Community. As I said at the beginning to my then honourable colleague, Mr. Rafton Pounder, whatever one says about Europe we shall stop criticism if there is a Court of Auditors to scrutinise every action of the Commission.

Mr. Marlow: If I heard my hon. Friend aright, he said that no doubt all these things will be ironed out and the Court of Auditors will be able to sort them out. He will be aware that the report states on page 62 that
the Commission has refused to communicate to the Court all relevant information on cases of fraud or irregularity",
so how can he be so confident that it will all turn out for the best?

Mr. Hill: If perfection was today, one could answer that. Not until Britain joined the Community was there any movement for a Court of Auditors. We now have the second report, which reveals fewer anomalies than the first. If my hon. Friends had examined the first report they would have seen evidence of serous near-frauds. The Court of Auditors is doing a wonderful job. We cannot denigrate it today. We are simply taking note of its report. It is not perfecton, but perfection must eventually come.
From my experience in Europe and of dealing with the Commission in particular, I know that many loopholes needed to be closed, and the Court of Auditors in Luxembourg is doing precisely that. I know nothing of the infringements of daily allowances that have been cited. I know that we go to Europe. An information service and a very static daily allowance is provided. We receive no other perks. We are expected to do the double job regardless, and there are no extraneous finances.
As we sit here criticising the rest of the Community, the Community is beginning to take advantage of our criticism. I believe that when the next budget is debated the Prime Minister will have an increasingly difficult time as a result of the current massive criticism of the Community, but I hazard a guess that, if a referendum were held now and many of us who are dedicated to Europe could put concise arguments over a period of four or five weeks, the result would be little different from the result in 1975. Indeed, I should welcome the opportunity of another referendum, as I believe that the few anti-Marketeers who are left of the multitude that once was would then be convinced that Europe is here to stay, warts and all.
The Court of Auditors is a worthwile institution. We should not merely support it. We should support it to the extent of accepting its report today, with all its warts and boils. I fully support the second report, and I hope that it will be accepted by the House.

Mr. Ridley: With leave of the House, may I say that we have had a very interesting debate which has

sometimes strayed from the technical details of the work of the Court of Auditors into wider European issues which I am sure the House will forgive me if I do not follow. Where I think there was total agreement was on the importance of the work of the Court of Auditors, the good work it has already done and our hopes for the future, despite the fact that there are different traditions and different accounting practices in all ten countries. It must be very difficult not to see in a different way of doing things an irregularity. It is to be hoped that eventually all these different ways of doing things will be brought together. We must be a little tolerant for that reason.
It was particularly nice and apt of my hon. Friend the Member for Southampton, Test (Mr. Hill) to pay tribute to Rafton Pounder, whom I so well remember. We can all take pleasure from the fact that it was very largely a British initiative which caused this court to be set up.
What emerged from all the speeches was the very great importance of the independence of the court from both the Council, the Parliament and the Commission. It is an absolutely vital and obvious point but one which I thought the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) got a little muddled over, when he was trying to make comparisons with the Comptroller and Auditor General here. He even went so far as to say that the Government were dominating Parliament over this issue. I think his words were "little short of a scandal."
I must insist that the Comptroller and Auditor General is absolutely and utterly independent. Although we may have our disputes about one or two aspects, I do not think the right hon. Gentleman would suggest that he was not independent or, whatever his relationship with the House, that he should not continue to be independent thereafter.

Mr. Robert Sheldon: The words were extracted from the comments of the right hon. Member for Taunton (Mr. du Cann), backed up by my right hon. Friend the Member for Heywood and Royton (Mr. Barnett).

Mr. Ridley: I do not think I would accept that. The right hon. Gentleman must also beware that any solution to this problem keeps the Comptroller and Auditor General as independent as the Court of Auditors.
This brings us to the question of tension, referred to in the Public Accounts Committee's report, between the various organs of the Community and particularly the Court of Auditors. In reply to the hon. Member for Birmingham, Erdington (Mr. Silverman), it is a strange thought that a firm of auditors or a court of audit should be encouraged to be more positive in supporting the good things which have been done. I do not know any commercial company whose auditors have ever patted it on the back, or even been asked to do so, in such a way as to detract from criticisms which they have made.
There should be that tension. As my hon. Friend the Member for Scarborough (Mr. Shaw) pointed out, there should be a healthy independence, a certain tension, but a creative tension, which they speak to each other in order to improve the relationship and to listen to what the court has asked it to do, and there is already a better atmosphere, but not one that detracts from the proper relationship between the auditor and those whom he audits.
The right hon. Gentleman, the hon. Member for Erdington and my hon. Friend the Member for Scarborough referred to access to the Commission's accounts at the bank. I am happy to tell the House that I


understand that the Commission and the court have now agreed on a procedure which both find satisfactory. This is one of those matters which arise from practice in the Benelux countries different from our own. I believe that the problem has been solved. I do not think that one is justified in regarding the Commission as having deliberately frustrated proper accountability by its attitude. Quite the reverse—it was seeking to behave with propriety in another direction.
There was lighthearted and good-natured banter between my hon. Friends about the Members of the European Parliament and whether they had been observing the court's dictates. There were accusations about excessive public holidays for the staff and excessive expenses for the staff over and above what the regulations allowed. I agree with my hon. Friend the Member for Flint, West (Sir A. Meyer) that it would be wrong to level that accusation at Members of the European Parliament. It is about the expenses of the staff, including the motor car expenses, and the difficult, but hardly fraudulent matter, of how many pages are produced by each typist.
All that auditors can do is to make information public. It is for those to whom the blemish appears to right that wrong. My hon. Friends who are critical have a point, in that if the Parliament is criticised by the court, for big matters or small, it, too, is beholden to deal with them. The hon. Member for Erdington rightly asked what the British Government would do about all this. In fact, it is not for the Government, the Council or the Commission. It is for the Parliament. Each of us must put right those blemishes which are within our responsibility.
The right hon. Gentleman's last point was about the provisional twelfths regime. Last year was the first in which it arose. It clearly did not work out properly on the first occasion, but I am happy to be able to tell the right hon. Gentleman that, in the review of the financial regulation, consideration is being given to a better way of arranging these matters, if we have the misfortune ever to have another provisional twelfths regime.
We agree with my hon. Friend the Member for Cheadle (Mr. Normanton) that the United Kingdom has made a great contribution to expenditure control in the Community. Dealing with the alleged blemishes would greatly enhance the reputation of the European Parliament. My hon. Friend probably heard hon. Members' criticisms.
I should also mention in reply the hon. Member for Erdington, my hon. Friend the Member for Southend, East (Mr. Taylor) and my hon. Friend the Member for Northampton, North (Mr. Marlow) who raised questions about frauds and irregularities. The problem is that the Commission believes that it would be wrong to release information relating to cases which have not yet been concluded before the courts. One can see both sides of the argument. Practice and legal matters are often different in the various countries of the Community. That is something we all understand with our sub judice rule. I am inclined to believe that the Commission has tried to do its best in a very difficult area, particularly in those cases where member States consider taking legal action.
I understand that discussions are in progress between the Commission and the Court of Auditors to agree a procedure which would be satisfactory to both institutions. As far as I can see, there could be no objection to releasing files which, for example, are about debts that are being recovered following negotiations for payment by instalment.

Mr. Roper: There is a difficult problem of timing. The investigation of fraud may run on during the period that the audit is carried out. By the time the investigation has been completed the auditors may have concluded their work for that particular period. There may have to be some variation in the regulation to enable the Court of Auditors then to start looking at a particular fraud.

Mr. Ridley: The hon. Gentleman is quite right, but I believe that it is encouraging that there is the possibility of an agreement between the two organs concerned. We must remember that our traditions have grown up over hundreds of years and are still evolving. How we can expect the European Community to get all those things right in such a short time, I know not.

Mr. Michael Shaw: The PAC runs across this just about every week. We have to make allowances and adjust our procedures accordingly.

Mr. Ridley: I am grateful to my hon. Friend, as I was grateful to him for his speech. I could not have agreed more strongly than when he said that we have to find ways of resolving those difficulties and learn how to work together in all three institutions.
My hon. Friend was particularly telling in relation to the 1982 budget, which was so near and yet so far. I make one slightly obstreperous observation, that we go through all the discussions about the need for Parliament to control expenditure—whether it be the United Kingdom Parliament or the European Parliament—as if that was all they ever strove to do. My experience both of the European Parliament in the autumn and of this Parliament over 22½ years is that all it ever strives to do is increase expenditure. I believe parliamentarians have to make up their minds what is meant by controlling expenditure, and whether it means more or less. There is in practice quite a big difference between the two.
I am happy to tell my hon. Friend the Member for Southend, East that the fitness centre is something that we all condemn as a Community expense and we have strongly supported criticisms of that expenditure which have been made in the Council. I am glad to hear that an entrance fee is now being charged. We will keep up the pressure to make sure that the centre is self-financing.
The same can be said for many of the points that my hon. Friend raised—for instance, the accounts of the European Movement. The accounts were eventually produced, as the hon. Member for Farnworth (Mr. Roper) said. Now it is agreed by the European Movement that it will reorganise its procedures and accounts so that they are satisfactory—again a tribute to the work of the Court of Auditors. I do not see anything wrong with that.
My hon. Friend the Member for Southend, East begged and bullied me to give him an answer on whether Mr. Ian MacGregor would go and sort the whole thing out. That is not within my responsibility, certainly not in this debate. Let us concentrate on the Court of Auditors, which is doing its best to do just that.
I know that there are a number of points that I have not been able to answer completely. I assure the House that everything that has been said will be reported to our representatives or to whichever Minister is next at the Council, so that what we feel about all the things that have been said is made clear.
I am sure that it is useful to have had this debate. If there are any points on which I can help hon. Members to whom


I have not been able to reply, I assure them that I shall write to them. But they will accept that all that the Government can do is to express their view in the Council, which in its turn can express its view either to the Commission or to the European Parliament. Therefore, Her Majesty's Government's responsibilities are important, but not so easy to discharge. I am grateful to the House for the help that it has given us in our task.

Question put and agreed to.

Resolved,
That this House takes note of the Annual Report from the Court of Auditors concerning the financial year 1980 together with the replies from the Institutions (European Community Document No. 11456/81) and supports the Government in seeking to ensure the sound management of Community finance.

HOUSE OF COMMONS (SERVICES)

Ordered,
That the Standing Order of 15th June 1979 relating to the nomination of the Select Committee on House of Commons (Services) be amended, by leaving out Mr. loan Evans and inserting Mr. Charles Morris.—[Mr. Budgen]

Civil Servants (Armitage Report)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Budgen.]

Mr. A. J. Beith: It is now over four years since the Armitage committee on the political activities of civil servants reported. It is perhaps instructive that we have had a different Armitage report since then on heavy lorries. The original Armitage report on the important, but different, subject of the freedom of Civil Servants to engage in politics and local government has been almost forgotten publicly in that time. Its recommendations have not yet been implemented.
The report was last debated in the House in an Adjournment debate raised by the hon. Member for Birkenhead (Mr. Field) almost a year ago on 26 March 1981. The Minister of State, Civil Service Department, replied. He now appears in a slightly different guise but has the same responsibilities. He said that the Government were in favour of implementing the recommendations and that they had begun consultations. I hope that we will find out tonight where we are now, because even this Government have had a couple of years to make progress on a matter that has been waiting four years.
There is a second reason why I press the urgency of the issues. It is a case well known to the Minister, that of Councillor Trevor Brown, who was serving with permission as an elected county councillor. In the course of those duties he spoke out about an issue that affected his place of work—Aldermaston—and the people whom he represented. He did so almost exactly two years ago. The consequences that he suffered and the way in which his case was handled demonstrate the importance and urgency of implementing the Armitage recommendations.
The background to the problem lies in the traditions and practices of the Civil Service. One of those traditions is the valuable tradition of impartiality. The other is the sometimes obsessive concern for secrecy.
A valuable feature of our Civil Service is that it can serve different Governments and Ministers impartially and equally. However, it does not follow that civil servants have no political opinions. They obviously do have political opinions. Nor should it follow, from the idea of a non-partisan Civil Service, that they are individually debarred from expressing or supporting political opinions in private life and during their own free time. Nor ought it to stop the majority of civil servants from being free to serve in local political organisations or on councils in local government. After all, local government depends on employers allowing their staff to undertake the responsibilities of serving on councils.
The Government—a large employer in Britain—ought to set a reasonable example to employers in their willingness to allow staff work on local authorities. Of course, there are, of necessity, some limitations on what can be allowed; some practical limitations—as in any form of employment—on those whose work makes it practically impossible to get to council meetings. There are also limitations on civil servants working most closely with Ministers at the head of Departments. However, such limitations ought to last only as long as the civil servant is in that position. It would also clearly be difficult to have a civil servant who dealt with local authorities in the course

of his work serving on a local authority. Therefore, a civil servant in a local government division of the Department of the Environment, for example, who helped to determine the grant level of a local authority, might be an unsuitable candidate to serve on such an authority.
However, our Civil Service includes a vast range of people to whom none of those limitations need apply, not only in industrial and clerical grades but in executive grades and, to people of even higher status whose work poses no such problem—for example, professional, scientific and technical officers and civil servants involved in training establishments and colleges. There is a wide variety of activity in the Civil Service which gives rise to none of the specific problems that I have mentioned.
The onus must be to demonstrate who should not be free to serve in local government or local political affairs, rather than the other way round. The Armitage report recommended a considerable widening of the categories allowed to engage in political and local government activities. It might have gone further than it did. but I should like to be told tonight whether the Government are at least ready to implement the main Armitage recommendations on the freeing of larger groups and categories of civil servants to engage in political activity and local government.
However, all those extensions of the range of people who can serve in local politics and local government will be seriously undermined if unreasonable restrictions are placed on civil servants when they are elected to local authorities. Individual Departments make the difficulties. They have the interest in limiting and controlling the freedom of their employees—civil servants—on local authorities. For that reason, an appeal body beyond individual Departments is so important. An Armitage recommendation was that there should be an appeal body wider than the Department, Civil Service-wide and with representatives of both sides of the national Whitley council on it.
Some of the other members of the Armitage committee, in minority proposals, wanted an independent hairman—perhaps a Privy Councillor. However, even the Armitage recommendation of a Civil Service-wide body would be a vast improvement on the present situation, where the only recourse is to the head of the Department concerned. There should be a proper appeal body with the power to consider both the refusal of permission to engage in political activity and restrictions placed on, or sanctions taken against, persons permitted to carry out public, local government or political activity.
That again brings me to the case of Councillor Trevor Brown. I know that the Minister who is to answer tonight is responsible for the general implementation of Annitage matters, although not for the initial handling of this case. However, this matter has implications that touch on the wider matters that I have mentioned.
Councillor Trevor Brown was an employee at the Aldermaston Atomic Weapons Research Establishment who had permission to become a member of a county council in 1973. He appeared on a BBC television programme two years ago and referred to aspects of radiation safety at Aldermaston which were of concern to citizens whom he represented, some of whom also worked at the establishment.
The Department tried to prevent him from appearing on the programme on the ground that it would be contempt of court for him to do so. He was naturally concerned and


took advice from the county solicitor of his local authority. The county solicitor was entirely satisfied that contempt of court could not arise because no proceedings had been entered in relation to any of the matters he referred to. The argument against him appearing therefore fell.
It was only after Councillor Brown had taken part that new arguments were presented about why he should not have done so. He was given a severe reprimand for referring to official matters and for making use of experience gained while employed in the department. He appealed and his appeal was dismissed. In the meantime, his stand was vindicated by the Pochin report, which revealed that safety lapses had occurred. The work involved was stopped for a time until new buildings were available. There was clear vindication that something had been wrong and that it was right that this should be made public and pressure applied.
Councillor Brown was later offered early retirement seven years ahead of time or the alternative of a job in Scotland. I know that he feels strongly that colleagues were offered better opportunities. He feels victimised as a result.
Many wider issues and lessons arise. Councillor Brown had no right of appeal beyond his own Department, which had a vested interest in hushing up the matter and preserving secrecy. That is a fundamental flaw in the present arrangements. It will obviously be the case that departments have a vested interest in taking a narrow view when an employee who also represents the area in which the institution is involved raises matters of concern to that institution. The appeal procedures are seriously defective. That is the first important lesson to be learnt from the case. There is a need for an adequate appeal procedure beyond the department.
Secondly, Councillor Brown was free to engage in political activity. He was given that permission. The condition to which he was properly subject was that he should act with moderation and discretion in matters affecting his own Department. That clearly assumed that so long as he abided by the requirement of moderation he was able to comment on matters affecting the Department. Yet the charge against him was that he had expressed views on official matters. Those two statements conflict—the view that he must act with moderation in dealing with such matters and the implicit claim that he had no right to refer to such matters at all. Anyone who saw the programme will know full well that he spoke with considerable moderation and care in the comments that he made and that he could not be accused of launching a great public attack on the department in which he happened to work.
There is a clear conflict between the code of conduct that I have quoted and the response that the Atomic Weapons Research Establishment gave when it wrote to Mr. Brown saying that
it is wholly inconsistent with the Code of Discretion that the Department should be expected to tolerate public criticism of its policies and practices by one of its own employees and I cannot see how the Department could ignore such action.
Is one to assume that no comment or criticism can ever be allowed? The term "official" is so wide that it might be taken to refer to other Departments as well as the one in which the civil servant concerned is employed. It seems that Councillor Brown and others in the same position are

not genuinely free to engage in local political activity even when they have been given permission to do so. He was prevented, or at least the Department sought to prevent him, from representing his constituents on an issue of legitimate concern to them and took sanctions against him when he persisted and did so.
A further paradox is that civil servants who are also trade union representatives appeared on the same programme with Councillor Brown and suffered no penalty for doing so. That draws attention to a passage in the Armitage report, in paragraph 100, where the committee explained in some detail that
the rules on political activity had tended to be applied less rigorously to staff acting in their capacity as staff association members'.
The committee added:
It has become not uncommon for serving civil servants, even those in the politically restricted category, to make speeches at the annual conference of their association which, in any other context, might be considered public comment on matters of public controversy".
The paragraph refers to types of occasion when civil servants who are trade union representatives are allowed to comment freely and critically, even when they come from politically restrictive categories.
How can the Government defend a situation in which a civil servant who is an elected councillor has less freedom than a civil servant who is a trade union officer? Why should the same rules not apply to both categories? In so far as limitations are necessary, why should they not be the same in each category? It is an extraordinary paradox that this Government, who wish to ensure that trade unions do not enjoy unfair advantages, should do the reverse and preserve a position where civil servants who are elected representatives of the community at large should be subject to limitations to which civil servants who are trade unionists are not.
The Minister responsible for the Civil Service is not the Minister who is responsible for what happened in this case, but he does have responsibility for the good name and practice of the Civil Service and he must take action in the following ways. First, he must press ahead with Armitage, including the appeal procedure, victimisation must be open to challenge and there must be proper appeal routes to allow someone to press ahead when he thinks that he has a claim.
Secondly, the Minister must establish rules and guidance for the whole of the Civil Service which give elected councillors the same sort of freedoms as trade union representatives. He must not allow Departments which have given permission to civil servants to serve as councillors to make them into ineffective councillors to protect narrow departmental interests.
We have not heard the last of the Trevor Brown case. The National Council for Civil Liberties has said that it is to take it to the European Court of Human Rights. The British Government's recent record of success in that court is extraordinary. They have been defeated time and again on major civil liberties issues and they may be defeated on this one. Mr. Brown should be publicly exonerated and there is a strong case for re-examining the financial and pensionary penalties that he suffered by accepting early retirement, which he did very reluctantly.
Councillor Brown was victimised. That should be put right, but he would be the first to argue that of even greater importance is the need to ensure that nothing like this happens again. The Armitage report provides the


Government with the opportunity to work out a better and fairer system and I should like to hear tonight that the Government intend to do so.
10.53 pm

The Minister of State, Treasury (Mr. Barney Hayhoe): As the hon. Member for Berwick-upon-Tweed (Mr. Beith) said, it is just under a year since we last debated the political activities of civil servants in the debate introduced by the Hon. Member for Birkenhead (Mr. Field). I suppose that I should congratulate the hon. Member on having as his Adjournment debate
the Armitage Report on the political activities of civil servants
but spending the majority of his time talking about the specific case of Mr. Trevor Brown, which has little to do with Armitage, although the hon. Gentleman sought to link the two.
Mr. Trevor Brown is a former employee of the Atomic Weapons Research Establishment at Aldermaston and the hon. Gentleman has acknowledged that that is primarily the concern of my right hon. Friend the Secretary of State for Defence. He is also the constituent of my hon. Friend the Member for Newbury (Mr. McNair-Wilson). I understand that my hon. Friend took the matter up some time ago with the Secretary of State for Defence both by letter and in a personal interview and my hon. Friend the Member for Newbury has done everything that was right and proper for his constituent in this matter.
In those circumstances alone it is somewhat surprising that the hon. Member should concentrate on this case in the way that he has tonight. In addition to what my hon. Friend the Member for Newbury has done, there has been a series of parliamentary questions in the House and in the other place on the matter. The latest one was from the hon. Member for Liverpool, Edge Hill (Mr. Alton) to the Prime Minister, who replied:
No. Mr. Brown has exercised his right of appeal under normal departmental procedures. He has had every opportunity over a quite considerable period to submit any and all representations which he felt relevant, and he has done so. His appeal has been rejected, and the reasons have been explained to him in detail and in writing. I see no basis on which to justify reconsideration of his case."—[Official Report, 11 November 1981; Vol. 12, c. 81.]
The matter was raised by Members in all parts of the House. A number of hon. Members have been involved, as have a series of Ministers. I make no complaint about that. The House of Commons exists to allow people to raise such matters. However, it is necessary to put in perspective what was said this evening, against the background that both the present and former Secretaries of State for Defence, both the present and former Minister of State for Defence, both the former Lord President of the Council and my predecessor as Minister of State, Civil Service Department, have all been involved in correspondence and discussions on the matter. Moreover, we have had two early-day motions.
I have gone over the whole history, and I must tell the House that it is absolute nonsense, based either on misunderstanding of the situation or on misrepresentation, to talk in any way of victimisation. I am surprised that the hon. Gentleman should speak in such an exaggerated and unjustified fashion. Let me remind him of the facts.
Mr. Brown appeared on a BBC television programme on 11 March 1980. During the programme, he publicly expressed views on official matters and made use of official experience—there is no dispute about that—after

having sought and been refused permission by his Department to do so. He sought permission, as it was right for him to seek permission, having been warned a year earlier that in commenting in such a way it was necessary to seek permission, and that permission was refused. Nevertheless, he went ahead, and did what he wanted to do. I do not question his motives. He sought permission, which he knew that he should do under the regulations, that permission was refused, and he went ahead, clearly in contravention of the Ministry of Defence's civilian staff regulation, based on the general rule governing the conduct of civil servants, which says:
A civil servant who wishes to take part in any outside activity which involves the disclosure of official information or use of official experience must obtain prior"—
I underline the word "prior"—
authority from his department".
In the light of the breach of those regulations, a disciplinary charge was brought against Mr. Brown. The normal disciplinary procedures used in such cases were then followed with great precision and care, and as a result Mr. Brown was found guilty of a disciplinary offence, and the penalty of a "severe reprimand" was imposed. He retired under the voluntary premature retirement scheme on 30 April 1981, at the age of 58. That was on offer to people of his grade and age in his sort of department as part of the rundown in the Ministry of Defence, and he took the conditions that were offered. It is wrong to suggest that, at a time when numbers were being reduced, he had any real expectation necessarily of going on to serve until he was 65.
Before he retired on 30 April 1981—on advice from his colleagues and superiors at Aldermaston, and as he was fully entitled to do—Mr. Brown appealed on 29 April against the decision that had been made, following the disciplinary offence. He appealed to his permanent secretary. After careful and detailed consideration, his appeal was rejected by Sir Frank Cooper on 16 October. I shall quote from the letter sent to Mr. Brown. Sir Frank Cooper is a distinguished civil servant, one who it would be monstrous to suggest would be party to victimisation of any kind. The letter said:
I believe, after an exhaustive review of the papers, that the decision was a fair one. I am in no doubt that your action was in breach of regulations. I can find no ambiguity in the rules or other circumstance or argument that warranted this action. In view of the suggestions about unfairness or prejudice in the m ay in which the disciplinary hearing was conducted and the case subsequently considered, I have looked with particular care for any signs of this and have found none. Moreover, you have had every opportunity over a'quite considerable period to submit any and all representations which you may have felt relevant to your case. This you have done on a number of occasions and I have considered all this material.
In the light of all the circumstances I believe that the severe reprimand awarded to you was justified and should stand. I therefore reject your appeal.
Therefore, Mr. Brown's case has been considered fully and in accordance with existing and agreed procedures. Moreover, it has had a considerable airing outside the Ministry both within Parliament and in correspondence between his own and other hon. Members and with Ministers concerned. At least 12 Members and Ministers, including the Prime Minister, have been involved.
I shall consider the wider aspects of this issue in the context of the Armitage report and the proposed appeal procedure that the report has recommended. The disciplinary charge against Mr. Brown was not directly related to his political activities.

Mr. Tam Dalyell: Come on.

Mr. Hayhoe: Indeed it was not. It was a disciplinary matter concerned with his conduct. He had been given permission to take part in political activities but, as with any other civil servant, such permission is subject to his continuing to abide by the existing principles of conduct. That would apply regardless of whether the Armitage committee's recommendations had been accepted and implemented.
The Armitage committee's recommendation for independent appeal machinery would not be relevant to this case, as it is proposed that the new machinery will consider appeals from civil servants who have not been given permission to take part in political activities. Mr. Brown was not denied such permission. The suggestion that his position as a local councillor was the same as that of a union spokesman is not correct.
Civil servants acting as union spokesmen are not required to obtain prior authority for public comment on official matters. This latitude is aimed at not restricting unduly their freedom of comment in an area central to their union interests. However, the exemption applies only where the matter under discussion directly affects the conditions of service of union members as employees, and where the spokesman himself is not officially concerned with the matter in question. Moreover, his public comment is still required to be consistent with the general principles applying to activities involving the use of official information or experience as set out in the Civil Service pay and conditions of service code.
A similar exemption would not be appropriate in the case of a civil servant who has been given permission to stand for election as a local councillor. In such a capacity he is acting outside the sphere of his official employment and the occasions on which there will arise any connection with official matters, leading to a need to comment in public, will be few and far between. In addition, and as noted in the Armitage report, the concept of political impartiality is not put at risk by actions taken by a civil servant in genuine pursuit of his role as a trade union representative.
In the few minutes that remain I shall take up the broad position of the Armitage report, which was the reason—at least on the Order Paper—why the hon. Gentleman initiated the debate.

Mr. Beith: rose—

Mr. Hayhoe: No, I shall not give way. I shall deal with the main subject, which the hon. Gentleman dealt with briefly. As he knows, the Armitage committee's recommendations were that staff in the grades of executive officer, higher executive officer and senior executive officer should be free to seek official permission to take part in political activities at the national level; that there should be standard criteria, based on the nature of the work carried out, for determining whether staff may be given permission to take part in political activities; that there

should be maximum block permission for staff to take part in political activities; and, as we have mentioned, that there should be an appeal body for civil servants refused permission to take part in political activities.
As I said about a year ago, the Government have decided to accept the Armitage recommendations in principle and discussions have been going on with the unions for some time with a view to agreeing revised rules on political activities which would reflect the majority Armitage recommendations. However, little progress has been made, as has been mentioned.

Mr. Dalyell: No progress.

Mr. Hayhoe: Let me explain what has happened. As I said when we last debated the matter, the Government's view has been conveyed to the Council of Civil Service Unions, which has been invited to consider the Government's statement in principle and to join in discussion to work out agreed changes to the code. We are still awaiting a reply from the Civil Service unions. It would appear that they do not attach the same urgency to that matter as to many other issues. One must acknowledge that they have been concerned with many important issues.
My general impression is that the existing rules continue to work reasonably well and succeed in ensuring ministerial and public confidence in the political impartiality of the Civil Service. However, since the Government are ready to allow the maximum freedom to individual civil servants compatible with this concept, and have accepted in principle the majority Armitage proposals which involve some liberalisation of the existing rules, I hope that it may be possible to make some progress on this in the coming months.
In March of last year the National Council for Civil Liberties asked whether it could submit comments on the Armitage report to the Government. I agreed that it could do so and that its comments would be considered. Its comments were in fact received a little under a month ago, at the beginning of February 1982. As one might expect, the NCCL, while giving a cautious welcome to many of the Armitage Committee's proposals, continues to support the line that it has taken over many years, that civil servants should be free to involve themselves in political activities; that there should be no real restrictions. It stands on the premise that such restrictions are both wrong in principle and undesirable in practice.
One can understand that viewpoint without sharing it. In my view, it underestimates the importance and the need for a politically impartial Civil Service. The NCCL's detailed comments are of course being looked at with care. However, I must reiterate the Government's clear view that appropriate restrictions must be continued—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at seven minutes past Eleven o'clock.